Russia
Russia 100512
Basic Political Developments
• Interfax: The RF Foreign Ministry hopes that the change of power in Britain shall improve relations with Russia
• EUobserver: Russian document prioritises better EU relations - A classified Kremlin strategy paper has said Russia should build better relations with EU countries in order to rescue its economy. But some EU capitals, including Warsaw, are wary of the change in tone.
• Wall Street Journal: In Secret Report, Russia Shifts Westward - In a confidential report, Russia outlined a shift toward a more pragmatic foreign policy aimed at building closer ties with the U.S. and Europe to help modernize its outdated industries.
• RASPADSKAYA MINE ACCIDENT
o AP: Time running out for 30 missing in Russian mine
o RIA: Siberian mine blast to cost $188 mln, take 1 year to repair - governor
o Interfax: Siberian mine disaster could cost Russia over 5 Bln rubles
o RIA: Death toll in Siberian mine blasts reaches 60
o Reuters: Russian mine death toll hits 60; 30 still missing
o Itar-Tass: 44 bodies from Kemerovo mine blast identified
• VOR: US Senate to get new START for ratification before end of week
• Reuters: Obama adviser warns Russia against arms sale to Iran
• alJazeera: US Warns Russia about S-300 Delivery, Cites Setbacks for Iran Nukes
• Itar-Tass: US-RF civilian n-cooperation deal fills relations with content – MP
• Financial Times: Obama rekindles nuclear deal with Russia
• VOR: Russia, US to hold more talks on Russian kids’ adoptions
• Russia Today: Russia and US hold second round of adoption talks
• Ukrainian Journal: Opposition groups to greet Medvedev May 17 visit with protests - “We have to get ready for the powerful rally of patriots on May 17,” Yulia Tymoshenko, a former prime minister and the leader of the largest opposition group, said in a statement on Tuesday. “This is the day when they plan to surrender Ukraine’s interests.”
• Interfax: UKRAINE, RUSSIA WILL NOT SIGN ENERGY AGREEMENTS ON MAY 17-18, KYIV SAYS
• RBC: Russia, Ukraine to sign border demarcation accord - Ukraine and Russia are set to sign an agreement on the demarcation of the state border during Russian President Dmitry Medvedev's official visit to Kiev on May 17, Ukrainian Prime Minister Nikolai Azarov announced at the cabinet meeting today. He called this document - which the previous administration failed to sign during its five years in power - "the most important document."
• Bloomberg: Russia, Ukraine Spy Agencies Forge Closer Ties, Kommersant Says
• RIA: Russian security service officers may return to Crimea
• MEDVEDEV IN TURKEY
o Reuters: DIARY - Turkey - to June 24, 2010
o WEDNESDAY, MAY 12
o ANKARA - Russian President Dmitry Medvedev and Turkey's President Abdullah Gul hold joint news conference after signing energy deals. 0815
o ANKARA - Russian President Dmitry Medvedev and Turkey's Prime Minister Tayyip Erdogan hold joint news conference after holding a bilateral meeting scheduled for 0900.
o ANKARA - Medvedev meets Parliament Speaker Mehmet Ali Sahin at 1315.
o ANKARA - Russia-Turkey business forum hold meeting at 1300.
o FRIDAY, MAY 21
o MOSCOW - Ecumenical Patriarch Bartholomew of Constantinople to meet Patriarch Kirill. Until May 31.
o VOR: Medvedev to focus on Middle East, energy and trade cooperation in Turkey
o Itar-Tass: Turkey’s Energy Ministry hopes to seal nuke plant deal with Russia
o RFE/RL: Nuclear Cooperation On Agenda As Russian President Meets Turkish Leadership
o Worldbulletin: Russia offers joint bank, Turkey wants new quota for meat exports
o Worldbulletin: Turkey, Russia agree to sign agricultural framework deal, protocols
o ArmeniaNow: Three to Tango?: Medvedev’s Turkey visit spurs talk on regional alliances
o News.az: Russian President visits Turkey - Another important aspect of Medvedev's visit, is about his delegation. Russian President's official delegation includes Chechnya and Tatarstan Presidents.
• Itar-Tass: Russia pledges further counter-terrorism efforts – Churkin
• VOR: Russia is concerned over growing terrorist activity by the Taliban
• Somalilandpress: SOMALIA: Russia executed all Somali pirates – spokesman
• Russia Today/Rossiyskaya Gazeta: Three approaches to pirates - Why Marshal Shaposhnikov released the maritime bandits. By Yuri Gavrilov
• VOV News: Russian press highlights Russian-Vietnamese ties
• Interfax: Georgian politician flees to S. Ossetia, fears for family's security
• RIA: Transdnestrian journalist admits spying for Moldova
• RFE/RL: Armenian Activists Urge Russia To Help Free Moldovan Journalist
• Itar- Tass: Russia demands investigation of vandalism acts in Germany – FM
• The Engineer: Moscow fusion reactor agreement - Russia and Italy have entered into an agreement to build a new fusion reactor outside Moscow that could become the first such reactor to achieve ignition, the point where a fusion reaction becomes self-sustaining instead of requiring a constant input of energy.
• RIA: Russian missile cruisers complete joint exercises - The Russian heavy nuclear-powered missile cruiser Pyotr Veliky and guided-missile cruiser Moskva have completed joint exercises and held a traditional farewell ceremony in the South China Sea.
• BarentsObserver: Typhoons will stay in service until 2019
• PTI: Russia's new research vessel named after geographer - Russia's new research vessel will be launched at the Admiralty Shipyards in November 2010 and named after distinguished Soviet geographer, Academician Alexei Treshnikov.
RIA: Space station crew set to relocate Russian spacecraft
• Space Travel: Soyuz Consultation Committee Sets Inaugural Launch For Fourth Quarter Of 2010
• Financial Times: Moscow stole from business, claims tycoon - Evgeny Chichvarkin, the former owner of Yevroset, Russia’s biggest mobile phone retailer, claimed the interior ministry had fabricated the case against him and appealed to Dmitry Medvedev, Russia’s president, to level serious claims against the ministry’s cybercrimes department.
• Moscow Times: Chichvarkin Names Enemies in a Video
• Dow Jones: UAE Ruler Brokered Deals For Dueling Russian Tycoons –Vedomosti
• Bloomberg: Prokhorov’s $200 Million Purchase of Nets Gets NBA Approval
• Wall Street Journal: Meet Prokhorov's Fixer-In-Chief - As the Tycoon's Nets Bid Advances, His Basketball Confidant, Sergey Kushchenko, Awaits Orders
• Ynet: Airlines: Russia can't handle competition - Aviation officials explain why Russian plane had to be grounded in order to secure takeoff of Arkia flight from Moscow
• Jamestown: Moscow Grooming a Political Team in Tbilisi – by Vladimir Socor
• RusBizNews: Russian Tank Falls Victim to Intrigues
• Itar-Tass: Medical products’ warehouse on fire in Vladimir suburb
• VOR: Press review
o The Russian printed press is focused on Dmitry Medvedev’s visit to Syria.
o Reporters of the Moscow-based daily Moskovsky Komsomolets have asked several experts to comment on the Raspadskaya coalmine blast, while the official inquiry into the accident is going on.
o Demand for gas in Russia and Europe has been steadily on the rise since January, the RBC Daily quotes Gazprom’s CEO Alexei Miller as saying.
o Brussels may come up with a “road map” for visa-free travel for Russians at the May 31 EU-Russia summit in Rostov, the Gazeta newspaper reports. The “road map” will specify the customs and border safety reforms Russia will need to carry out. The mandatory measures include biometric passports and a law on data protection.
o The security agencies of Russia and Ukraine are planning to push a “reset button” to mend their ties that suffered a dramatic setback under the Yushchenko regime.
National Economic Trends
• Bloomberg: Russia Faces Massive Capital Influx on Low Debt, Dmitriev Says
• Reuters: Russian bank balances rise to 476.7 bln rbls
• CBR: Russia’s foreign trade surplus leaps 2.5x in Q1
• RenCap: Foreign trade statistics: Imports recover strongly in March
• Shuvalov: ruble is expected to appreciate in the mid term
• VTB Capital: Authorities want to spur longer term investments into Russia
• Moscow Times: State Sees Capital Controls This Year
Business, Energy or Environmental regulations or discussions
• Bloomberg: Gazprom, Tatneft, Polyus, Raspadskaya: Russia Equity Preview
• Bloomberg: Russian Coal Mine Outage Unlikely to Hit Global Market, UBS Says
• Dow Jones: Raspadskaya Faces Huge Costs From Blast-Damaged Mine –Vedomosti
• Moscow Times: Privatization to Get Information Support
• RIA: Russia's State Duma to consider luxury tax bill – paper
• Bloomberg: Toyota, GM Say New Russia Rules Threaten Output, Kommersant Says
• Troika: Energy Ministry proposes 60% less new hydro capacity than RusHydro
• RIA: Maximum 20 Banks lose their licenses due to lack of capital from 2012
• Moscow Times: Proposed Bill Could Make Rusnano Joint-Stock Company
• Moscow Times: Siemens to Build Facility
• Reuters: Russia's Uralkali says potash tariff a blow
• VTB Capital: Uralkali’s President sees a strong recovery in global demand
• Moscow Times: Rostelecom Loses Monopoly
• VTB Capital: Vimpelcom might have to pay 20% in addition to acquisition price to two former Golden Telecom shareholders
• Moscow Times: Cyrillic Domains May Start Working This Week
• Moscow News: The Digital Sky’s the limit – is Russia’s internet advance more than a question of business?
• Steel Guru: Severstal scrap processing division increases sale by 40pct YoY
• Russia Today: Upmarket clothiers return to the scene
• Troika: Russias Far East: the coming supplier to Asias tigers
Activity in the Oil and Gas sector (including regulatory)
• Reuters: Russia to raise June oil export duty to $291-294/T
• Interfax: Russia could raise oil export duty $10 to $294 per tonne on June 1
• Moscow Times: Proposal on Oil Tax Breaks - Under the proposal, the duty for the fields would be nullified when oil prices are less than $76 to $79 a barrel, compared with $15 for most Russian deposits, Vedomosti said. Alternatively, the ministry suggested setting the level separately for each deposit, the newspaper said.
• Pipelines International: Samsun – Ceyhan pipeline partners meet in Ankara
• Oil and Gas Eurasia: Russia Frees Geological Data From Pay To View
• Reuters: Russia's Tatneft mulls benchmark Eurobond
Gazprom
• Pipelines International: Gazprom may join Arabian Gas Pipeline
• Oil and Gas Eurasia: Gazprom neft Increases Production
• RIA: Russia, Europe increase gas demands - Gazprom CEO
• Oil and Gas Eurasia: Gazprom Dobycha Shelf Prepares for Second, Third Phases of Shtokman
• BarentsObserver: Statoil beats Gazprom
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Full Text Articles
Basic Political Developments
12.05.10 11:24
Interfax: The RF Foreign Ministry hopes that the change of power in Britain shall improve relations with Russia
GOOGLE TRANSLATION
May 12. Interfax-Russia.ru - Moscow hopes that the coming to power in Britain of the new leadership will give impetus to the development of Russian-British relations.
"We hope that the coming to power a coalition government of conservatives and liberal democrats will give new impetus to our bilateral relations, including in addressing the problems that have accumulated over recent years" - said Wednesday, Interfax "a source in the ministry said.
As previously reported, following the parliamentary elections in Britain the Conservatives and Liberal Democrats have agreed on forming a coalition government, led by Tory leader David Cameron.
The interviewee said that Moscow respects the choice of the British.
"We are working with the leadership, which chose the vast majority of British voters," - said the source.
EUobserver: Russian document prioritises better EU relations
ANDREW RETTMAN
Today @ 09:25 CET
EUOBSERVER / BRUSSELS - A classified Kremlin strategy paper has said Russia should build better relations with EU countries in order to rescue its economy. But some EU capitals, including Warsaw, are wary of the change in tone.
The document, entitled "The Programme for Effective Use of Foreign Policy in the Long Term Development of Russia," is dated February 2010 and written in the name of foreign minister Sergei Lavrov to President Dmitry Medvedev. The Russian edition of Newsweek magazine on Monday (10 May) published the text on its website.
Mr Lavrov in the preamble says Russia should create "modernisation alliances" with EU states in order to help its petro-based economy emerge from the global financial crisis.
The paper highlights France, Germany, Italy and Spain for "priority co-operation." It talks of using the Franco-German "tandem" to help gain approval for new policies at EU level. It also speaks of developing the Russia-EU-US "triangle" to gain respectability on the world stage.
In terms of concrete projects with France, it envisages new Peugeot-Citroen and Renault car factories in Russia, a joint space programme in Guinea, joint renovation of the Belene nuclear plant in Bulgaria and further co-operation between Gazprom and Electricite de France.
In Germany, it lists ongoing support for the Nord Stream gas pipeline, joint work on a new electron laser and on the Airbus A350 jet.
In Italy, it seeks to attract Italian firms to upgrade Russian railways, ports and airports and to use Italian expertise on how to stage the Sochi 2014 Winter Olympics.
EU countries Bulgaria, the Czech Republic, Cyprus, Estonia, Greece, Latvia, Lithuania, the Netherlands, Portugal, Romania, Slovakia and Slovenia are also named in the text. Former Soviet vassals Armenia, Azerbaijan, Belarus and Ukraine come in for special attention as well.
Meanwhile, Russia has circulated a parallel document, entitled "Partnership for Modernisation," in Brussels ahead of the EU-Russia summit in Rostov-on-Don on 31 May.
The partnership text highlights technology transfer in line with Mr Lavrov's new programme and is designed to be adopted by both sides in Rostov-on-Don. The partnership paper is intended to stand alongside a new EU-Russia bilateral treaty, currently under negotiation, which also covers pro-democratic reform, human rights and rule of law.
Polish foreign minister Radek Sikorski at an EU foreign ministers' meeting in Brussels on Monday poured a little cold water on the idea of a major Russian transformation.
He said that if Moscow was serious about nuclear disarmament it should bring its stockpile of warheads down from 2,000 to 220, the total number in EU states. He also complained that the Partnership for Modernisation is an attempt to cherry-pick subjects from the bilateral treaty, while leaving difficult issues, such as rule of law in Russia, aside.
The foreign minister of Hungary shared Mr Sikorski's reservations, an EU diplomat said.
Russia-sceptics looking at Mr Lavrov's new programme would meanwhile find plenty of material to feed concern.
The Kremlin paper envisages aggressive Russian expansion in the energy sector in Estonia, Latvia and Lithuania. Russia should "strengthen [its] economic presence in the Baltic states, given the sharp fall of their investment attractiveness for EU countries and a serious reduction in the price of national assets," it says.
It also advises the acquisition of controlling stakes in Belarus petroleum refineries and Ukraine's gas transit pipelines, both important strategic assets.
"If you look at what Russia has been doing in the post-Soviet countries in the past few months, it is taking back control in an arc from north to south. The Eastern Partnership is dead in the water," an EU official said, referring to the EU's flagship integration policy for its post-Soviet rim.
Wall Street Journal: In Secret Report, Russia Shifts Westward
By GREGORY L. WHITE
MOSCOW—In a confidential report, Russia outlined a shift toward a more pragmatic foreign policy aimed at building closer ties with the U.S. and Europe to help modernize its outdated industries.
The program detailed a shift away from the more confrontational line the Kremlin had taken in past years. It singled out the Obama administration for praise for its more cooperative approach to Moscow.
A Russian official confirmed the authenticity of the document, which was addressed to President Dmitry Medvedev by Foreign Minister Sergei Lavrov. It was first reported Monday by Russian Newsweek, which ran the document's full text on its website.
A Kremlin spokesman said the program, dated February, hasn't been officially approved. But some elements, such as a deal with the U.S. to reduce nuclear weapons, have already been implemented. Its spirit was reflected Sunday, when U.S. and European troops for the first time marched alongside Russian forces during Moscow's annual military parade marking the end of World War II.
"It's a document that reflects the mainstream in today's Russian political leadership," said Dmitry Trenin, director of the Carnegie Moscow Center.
The report also includes insights into Moscow's relationships with former Soviet republics. It calls for taking advantage of the global financial crisis to acquire industrial and energy assets in the Baltics, Belarus, Ukraine and Central Asia—all areas where Russian influence is a sensitive political issue.
On many issues, the Kremlin hasn't lined up completely with the West. On a visit to Syria on Tuesday, Mr. Medvedev suggested Moscow might be interested in nuclear-energy deals there. The U.S. has opposed any nuclear cooperation with Syria until Damascus allays international concerns a suspected nuclear-weapons program destroyed by an Israeli strike in 2007.
On the issue of Iran's nuclear ambitions, U.S. officials say Russia has largely come around to supporting Washington's efforts to tighten sanctions on Tehran. But the report leaked Monday names Iran as a potential flash point for renewed conflict with the West in the event of a military strike against Iranian nuclear facilities, which Moscow staunchly opposes.
The report details a foreign-policy approach Mr. Medvedev called for during his annual address to parliament in November. Saying that "puffing up our cheeks" was pointless, he declared then that foreign policy should aim to help modernize Russia's underdeveloped economy.
In a cover letter to the report, Mr. Lavrov calls for creating "alliances of modernization" with European countries to attract needed technology and wrote that "It is necessary to find opportunities to use American technological potential." The report singled out Germany, France, Italy and Spain as Russia's closest partners in Europe.
Though the document includes traditional denunciations of U.S. ambitions to maintain global dominance, it hails the Obama administration for its "transformational potential" in relations with Russia. President Barack Obama has sought to revive ties with Moscow, dropping many initiatives that had irked the Kremlin, including plans for missile-defense systems in Poland and the Czech Republic and staunch support for leaders in Georgia, and previously Ukraine, who took an anti-Russian stance.
"The overall climate is better than it has been since the time of Perestroika," said Vyacheslav Nikonov, a foreign-policy analyst and frequent Kremlin adviser. "Russia has started to react to the more cooperative policy from the West."
He and other analysts noted that the Kremlin's new approach bears some risks, especially as Moscow reasserts its influence in the former Soviet Union.
Mr. Nikonov noted that Mr. Medvedev's focus on weaning Russia's economy from its dependence on oil and other natural resources and stimulating high-technology industries mandated the Westward focus. "The sources of modernization and innovation are in the West, not the East," he said.
Though the report notes Moscow's partnership with China and other major developing countries, it gives much more attention to ties with the U.S. and Europe. The report also says that after several years of military buildup, the Kremlin aims to reduce defense spending as a share of the economy.
—Ira Iosebashvili contributed to this article.
Write to Gregory L. White at greg.white@
RASPADSKAYA MINE ACCIDENT
AP: Time running out for 30 missing in Russian mine
By SERGEY PONOMAREV (AP) – 53 minutes ago
MEZHDURECHENSK, Russia — Rescuers struggling through the blast-shattered corridors of a Siberian coal mine have nearly reached the last area where any of 30 missing miners could still be found alive, Russia's Emergencies Minister said Wednesday.
But little time remains for the potential rescue of anyone still alive three days after a pair of explosions shook the Raspadskaya mine, Russia's largest underground coal mine.
"We've got a day to bring out miners, if they're there," minister Sergei Shoigu told reporters.
His ministry said Wednesday that the confirmed death toll in the blasts had risen to 60.
Shoigu said that concentrations of volatile methane in areas of the mine are as much as three times the amount considered safe and that full ventilation to the mine wouldn't be restored for at least another day. There are fires still smoldering after the explosions and officials are concerned that full ventilation could feed those flames and set off new blasts.
Asked whether he thought any survivors might be found after so many days, Shoigu said "My profession makes provisions for only one answer — we hope that, yes, they are there."
Many of the dead were rescue workers who went into the shafts after the first blast late Saturday and were caught in the second explosion — which was so powerful that it shattered the main shaft and a five-story building at the mine head. The mine is in the Kemerovo region about 3,000 kilometers (1,900 miles) east of Moscow
Both the explosions are being blamed on methane, and Prime Minister Vladimir Putin on Tuesday questioned why rescuers were sent into the mine without a preliminary assessment of the gas concentration, according to the RIA Novosti news agency.
The head of the mine rescue service, Alexander Sin, said rescuers are under orders to immediately render assistance, the agency reported.
Putin ordered officials to investigate "how production technology was observed, how control instruments operated, what measures the mine managers took to raise reliability, what was the state of individual means of protection and how rescue operations were organized."
There was no information on what set off the blast. Mine explosions and other industrial accidents are common in Russia and other former Soviet republics, and are often blamed on inadequate implementation of safety precautions by companies or by workers themselves.
But regional governor Aman Tuleyev was quoted by the business newspaper Vedomosti as saying the mine was one of the world's most technically advanced.
The deadliest explosion in Russia's coal mines in decades occurred in March 2007, when 110 miners were killed.
The Raspadskaya mine produces about 10 percent of Russia's coking coal, Vedomosti said, and a long interruption of production could affect Russia's steel industry.
Associated Press Writer Jim Heintz in Moscow contributed to this report.
Copyright © 2010 The Associated Press. All rights reserved.
RIA: Siberian mine blast to cost $188 mln, take 1 year to repair - governor
11:4012/05/2010
Damage from two deadly blasts that hit a west Siberian mine at the weekend, killing at least 60 people, could reach 5.7 billion rubles ($188 mln), the regional governor said on Wednesday.
At least 99 people were also injured and 30 are still missing after two explosions at the Raspadskaya coalmine, near the town of Mezhdurechensk in the Kemerovo Region, over the weekend.
Aman Tuleyev said it would take about twelve months to reconstruct the mine, adding that about 5 billion rubles ($165 million) was required to rebuild the underground part of the coalmine and some 700 million rubles ($23 million) to reconstruct structures above the ground.
"The coalmine cannot be reconstructed at once. It will take about a year. The rationale is that it must be reconstructed part-by-part. The least-damaged part has to be reconstructed first and then the remaining parts will be rebuilt," Tuleyev said.
The governor also said Raspadskaya produced every fifth metric ton of coking coal for the Russian steel industry.
Russian business daily Vedomosti reported on Wednesday that the Raspadskaya Coal Company and its shareholders will have pay a high price for the deadly explosions at the Raspadskaya coalmine.
On Tuesday, the first day of trading on the Russian stock market after the Victory Day celebrations, the company's market capitalization plunged $889 million while reconstruction efforts could take years and cost hundreds of millions of U.S. dollars, the paper said.
A top manager of a Russian coal company told Vedomosti that expenses could hit $600-700 million if the coalmine had to be rebuilt anew. The repair of equipment and the partial reconstruction of the infrastructure could cost $150-200 million. However, expenses will increase considerably, if the coalmine has to be flooded, the manager said.
If the coal company stands idle until the end of the year and the Raspadskaya Coal Company does not build up output at other coalmines, its revenues may plummet 40% this year from $1 billion projected before the explosions to $500-600 million, Boris Krasnozhyonov, an analyst with Renaissance Capital, told Vedomosti.
The coalmine's idleness will take a much larger toll on the company's EBITDA (earnings before interest, taxes, depreciation and amortization) and net profit, which could plummet 62% (from $700 million to $273 million) and 88% (from $388 million to $50 million), respectively.
Not surprisingly, investors tried to get rid of Raspadskaya shares on Tuesday, which shed 26.5% of their value in the Russian Trading System (RTS) stock exchange while the company's capitalization plunged from $4.249 billion to $3.36 billion, the paper said.
MEZHDURECHENSK (Kemerovo region), May 12 (RIA Novosti)
May 12, 2010 10:38
Interfax: Siberian mine disaster could cost Russia over 5 Bln rubles
MEZHDURECHENSK. May 12 (Interfax) - The recent gas explosions at the Raspadskaya coal mine in Siberia could cost the state more than five billion rubles, Kemerovo Region Governor Aman Tuleyev told journalists.
"We have calculated that damage caused as a result of the destruction of buildings on the surface stands at 700 million rubles, and inside the mine approximately five billion rubles. But these estimates are not final," Tuleyev said.
The damaged mine will resume operations gradually, the governor said.
"Rebuilding the first section of the mine will take nearly four months, and restoring the second part two months. This is our tentative forecast," Tuleyev said.
Every fifth tonne of coking coal produced by Russia's entire metallurgical industry originates from the Raspadskaya mine, the governor said.
"Virtually the whole metallurgical industry depends on it [the Raspadskaya mine]. We will now have to think how to restructure our entire coal production work," he said.
Up to 359 people were underground when the first explosion happened at 8:54 p.m. Moscow time on May 8. A total of 259 people were brought safely to the surface. The second explosion came several hours later when 54 rescuers were working at the mine.
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RIA: Death toll in Siberian mine blasts reaches 60
07:2812/05/2010
Rescuers found eight more bodies during the overnight rescue effort at a west Siberian coal mine, bringing the current death toll to 60 people.
"Rescuers have found another eight bodies, which brings the death count to 60 people," a rescue operation official said on Wednesday.
At least 99 people were injured and 30 are still missing in two explosions at the Raspadskaya coalmine, near the town of Mezhdurechensk in Kemerovo Province over the weekend.
Russia's Emergencies Minister Sergey Shoygu, who had flown to the mine to personally supervise the rescue operation, earlier said that the rescue effort had been hampered by the threat of further explosions, underground fires and piles of debris.
Nine rescue teams are trying to reach the areas where the missing miners were working at the time of the first explosion last Saturday.
Russian President Dmitry Medvedev has ordered that rescue operations continue until it is clear that all possible efforts have been taken to save the lives of people who have been trapped underground.
The Raspadskaya mine is Russia's largest coalmine, producing 10% of coking coal in the country. It is characterized by high concentrations of methane, a gas that is released from coal or surrounding rock strata in the process of coalmining.
MEZHDURECHENSK (Kemerovo Region), May 12 (RIA Novosti)
Reuters: Russian mine death toll hits 60; 30 still missing
3:08am EDT
MOSCOW (Reuters) - Rescuers working through the night found eight bodies but no survivors in a stricken Siberian coal mine on Wednesday after powerful weekend blasts that killed at least 60 people, emergency officials said.
Thirty workers were still missing three days after the explosions in the massive Raspadskaya mine in Mezhdurechensk, in the Kemerovo region about 3,000 km (1,850 miles) east of Moscow.
Hopes of finding any alive were fading fast as grieving relatives buried the bodies of victims recovered from the mine.
An explosion authorities said was a methane gas blast ripped through the mine late on Saturday, followed hours later by a stronger blast that wrecked the mine's main ventilation shaft and badly damaged buildings on the surface.
The disaster was the deadliest in a Russian mine since 110 people died after a methane blast at the Ulyanovskaya mine, also in the coal-rich Kemerovo region, in March 2007.
Shares in mine owner Raspadskaya, Russia's largest stand-along coking coal producer, plunged 23.4 percent on Moscow's MICEX exchange on Tuesday in the first day of trading after the weekend disaster.
Raspadskaya says its mine is Russia's largest underground coal mine, and analysts said the disaster could affect supplies and drive up prices in a tight market.
Raspadskaya produced 13 to 14 percent of total Russian coking coal concentrate output in 2009, supplying Russian steel giants Evraz, MMK and NLMK, Citigroup analysts said in a research note on Tuesday.
Analysts at Troika Dialog said the accident would likely hurt steelmakers Evraz and NLMK in addition to Raspadskaya.
The mine could be out of operation for a month or two and is unlikely to reach full capacity until the fourth quarter of 2010, they said in a research note on Tuesday.
(Reporting by Steve Gutterman; Editing by Maria Golovnina)
Itar-Tass: 44 bodies from Kemerovo mine blast identified
12.05.2010, 00.17
MOSCOW, May 12 (Itar-Tass) - Forty-four bodies from the Raspadskaya mine blast at the Kemerovo region were identified, Investigative Committee spokesman Vladimir Markin told Itar-Tass on Tuesday.
“At present, forty-five bodies have been recovered and brought to the surface, forty-four of them have been identified,” he said.
Investigative Committee chief Alexander Bastrykin, who arrived at the scene of the accident, held a meeting with participation of officials of the main investigative department, chiefs of the Russian technical watchdog, the Federal Security Service and the Kemerovo region prosecutor general’s office.
Concrete actions were taken to study all possible versions of the blast, Markin said.
VOR: US Senate to get new START for ratification before end of week
|May 12, 2010 09:57 Moscow Time |
The new Russian-US treaty on reducing strategic offensive weapons, START, is due to be submitted to the US Senate for ratification before the end of this week. This came in a statement on Wednesday by the Assistant US Secretary of State Rose Gottemoeller. The State Department has prepared the text of the treaty, and also a protocol and supplements to the treaty. The official voiced certainty that START would be ratified this year.
Reuters: Obama adviser warns Russia against arms sale to Iran
Wed May 12, 2010 7:58am IST
By Susan Cornwell
WASHINGTON (Reuters) - The United States has made it clear to Russia that delivering an anti-aircraft system to Iran would have severe consequences for U.S. ties with Moscow, a senior advisor to President Obama said on Tuesday.
In a generally upbeat assessment of ties with Russia, Gary Samore, White House coordinator for arms control, weapons of mass destruction proliferation and terrorism, said he thought Russia understood Washington's position and would be surprised if Moscow shipped the S-300 anti-aircraft system that Iran has ordered.
"We've made it very clear to the Russians that that would have a very significant impact on our bilateral relations," said Samore. "I think the Russians understand that the consequences would be very severe."
Tehran has urged Russia not to bow to Western pressure over the sale of the system which, analysts say, could help Iran thwart any attempt to bomb Iran's nuclear facilities.
The United States and Israel have refused to rule out military action against Iran if diplomacy fails to resolve the dispute over its nuclear facilities. Tehran says its nuclear program is for peaceful purposes, but Western governments believe it is aimed at bomb-making.
Washington is pressing other global powers to agree to a fourth round of U.N. sanctions against Tehran over its refusal to halt its nuclear work, but Samore said Iran's program had suffered technical setbacks, giving diplomacy a bit more time.
"The nuclear clock is not moving as quickly as some feared," he said.
DEFENDING RESET WITH RUSSIA
Samore defended the Obama administration's decision this week to revive an agreement with Russia in which the two countries would cooperate on civilian nuclear energy, saying the Russians had been more cooperative on issues ranging from dealing with Iran to reducing nuclear arms.
But he stopped short of saying that the proposed nuclear deal would be withdrawn if the Russians sent the anti-aircraft system to Iran, or backed away from supporting a new resolution on U.N. Security Council sanctions against Iran.
"I think we are seeing good cooperation from the Russians and I think that will be apparent to everybody once the Security Council takes action," Samore said. "I think we will get a good resolution with Russian and Chinese support."
Washington's effort to renew the civilian nuclear deal with Russia is the latest attempt to "reset" U.S. relations with Russia, one of President Barack Obama's foreign policy priorities.
The civilian nuclear deal was shelved almost two years ago over Russia's war with Georgia, when relations between Washington and Moscow reached a post-Cold War low.
The agreement is not a treaty but it must be submitted to Congress for a 90 day review and lawmakers can vote to kill it before it becomes effective.
Some Republicans in Congress have expressed concern that Obama is going too far in Russia's direction before getting Moscow to sign on to a tough sanctions resolution on Iran.
"By trading this agreement for Russian support for a weak, meaningless round of Iran sanctions at the UN Security Council, the U.S. has severely hampered its own efforts to isolate the Iranian regime," said Ileana Ros-Lehtinen, the ranking Republican on the House Foreign Affairs Committee.
alJazeera: US Warns Russia about S-300 Delivery, Cites Setbacks for Iran Nukes
12/05/2010 07:29:09 AM GMT
A senior advisor to US President Barack Obama says delivery of a Russian anti-aircraft system to Iran would have serious consequences for US ties with Moscow.
Gary Samore, the White House coordinator for arms control, “weapons of mass destruction proliferation and terrorism�, said he thought Russia understood Washington's position and he would be surprised if Moscow shipped the S-300 anti-aircraft system that Iran has ordered.
"We've made it very clear to the Russians that that would have a very significant impact on our bilateral relations," Reuters quoted Samore as saying on Tuesday. "I think the Russians understand that the consequences would be very severe," he added.
Last month, a senior Russian official stated that Moscow would implement a contract with Iran which obliges Russia to deliver the advanced missile system to the Islamic Republic. "Contracts have been signed, and they are being implemented — they have not been torn up," the head of Russia's Federal Agency for Military Cooperation, Mikhail Dmitriyev, said.
Russia signed a contract with Iran for the sale of at least five S-300 air defense systems in December 2005. However, Moscow has not made the delivery since then, possibly under pressure from Washington and Tel Aviv.
On Iran's enrichment program, Samore said that Tehran had been set back by problems with its centrifuges and by disclosure of an enrichment plant near Qom that the United States alleges was part of a secret nuclear program. Samore said that because of the setbacks, "the nuclear clock is not ticking as quickly as some had feared."
¬
Source: Al Manar
Itar-Tass: US-RF civilian n-cooperation deal fills relations with content – MP
12.05.2010, 03.18
MOSCOW, May 12 (Itar-Tass) - The US administration’s return to ratification of an agreement on civilian nuclear cooperation fills the Russia-U.S. reset with real content, the chairman of the Russian Federation Council’s international affairs committee, Mikhail Margelov, told Itar-Tass by phone.
“The President Obama administration returned to ratification of the bilateral 123 agreement. In connection with this we can speak about filling the reset in the two countries’ relations with real content and can believe that it will not be restricted only by the signing of the treaty on strategic arms reduction,” he said.
“Gusts of passion on Georgia that seized the former U.S. administration naturally exhausted themselves and sober calculations took the 123 agreement onto political and economic track,” Margelov said.
At the same time he noted that the agreement “is equally advantageous for Russia and the United States, as it expands our cooperation in the nuclear sector.”
Margelov recalled that the two countries’ presidents signed the document back in 2008 and submitted it to parliaments for ratification. However, the United States expressed “inadequately nervous” attitude to Russia’s recognition of South Ossetia and Abkhazia’s independence and revoked the agreement from the Congress.
“At present, our relations are changing for the better, which is in particular confirmed by Obama’s decision,” he said.
Margelov stressed that the main thing is that the Congress should not veto the document within three months. “If this does not happen, the agreement will enter into force automatically.”
“This would create the groundwork for drafting a legal base for trade in nuclear materials and for the development of innovative nuclear technologies,” the parliamentarian said adding that “the agreement will give a fresh impetus to cooperation in prevention of uncontrolled proliferation of nuclear technologies.”
Financial Times: Obama rekindles nuclear deal with Russia
By Daniel Dombey in Washington
Published: May 12 2010 03:00 | Last updated: May 12 2010 03:00
The Obama administration has revived a contentious civil nuclear deal with Russia in an attempt to reward the Kremlin for co-operation over Iran - even though the issue has yet to come to a vote at the United Nations Security Council.
The move paves the way for billions of dollars in potential business ties, including the transfer of nuclear technology and contracts to build nuclear reactors.
It follows recent complaints by Vladimir Putin, Russian prime minister, about the relatively low levels of trade and investment between the two countries and long-standing Russian calls for a civil nuclear deal.
Mr Obama's decision to move ahead with implementing the deal, announced late on Monday night, will be a test of sentiment in the US Congress, which has the power to block it.
The agreement was originally negotiated by the Bush administration, but the approval process was frozen after the 2008 Georgian-Russian war. Several leading members of Congress had already expressed reservations about the deal, in large part because of Russia's relations with Iran.
Issuing a formal notice to revive the agreement, Mr Obama declared that "the situation in Georgia need no longer be considered an obstacle" and added that "the level and scope of US-Russia co-operation on Iran are sufficient to justify resubmitting the proposed agreement".
But he is likely to confront scepticism on Capitol Hill, particularly among Republican ranks.
"This agreement is sending the wrong message, at the wrong time, to the wrong actors," said Ileana Ros-Lehtinen, the ranking Republican on the House of Representatives foreign affairs committee. "It is rewarding Russia for its ongoing efforts to assist Iranian proliferation and prevent tough UN sanctions on Iran."
In another development that could complicate the deal, Dmitry Medvedev, Russia's president, said during a trip to Syria yesterday that Moscow and Damascus could co-operate on nuclear energy, while the Russian energy minister added that Moscow could also help Iran build more reactors.
But the Obama administration argues that co-operation with Russia over Iran has greatly intensified in recent months, with Moscow indicating it is prepared to support UN sanctions - albeit "targeted" measures rather than broad-based ones.
The agreement will enter into force after 90 days of Congressional session unless both houses vote it down.
VOR: Russia, US to hold more talks on Russian kids’ adoptions
|May 12, 2010 09:51 Moscow Time |
On Wednesday Moscow is due to play host to the second stage of Russian-US talks to reach agreement on regulations for Russian kids’ adoptions in the United States. The problem was aggravated by the incident involving the eight-year old Artem Savelyev, who was sent back to Moscow by plane by his US foster-mother in early April with a note saying that she no longer wanted the boy as her son. Russia has already handed over to the US delegation a relevant draft law providing for the setting up of a single body that would settle all problems pertaining to the adoption of Russian children abroad, including the issue of subsequent control of the situation the kids are in.
Russia Today: Russia and US hold second round of adoption talks
12 May, 2010, 09:30
A US delegation is in Moscow for the final round of negotiations to lift an adoption ban for Russian children and finalize a deal between the two countries.
Adoption from Russia to America was suspended last month after the culmination of several cases of neglect by foster parents, including the deaths of Russian children in the US, over recent years.
The first round of negotiations took place in Moscow on April 29 and 30. Back then, Russia handed the American side a draft agreement. Now the concrete details of it are expected to be discussed.
The deal will lead to the creation of a special Russian-American body for foreign adoption, which will also be following the fate of adopted children in foster families.
The American delegation is headed by Principal Deputy Assistant Secretary for Consular Affairs Michael Kirby. The Russian representatives include officials from the Education Ministry, the General Prosecutor’s Office and the Russian Commissioner for Children’s Rights Pavel Astakhov.
Adoption by US nationals was frozen after seven-year-old Artyom Saveliev, adopted by an American mother about six years ago, was returned to Russia last month with a note saying that he was no longer wanted.
Overall, since 1992, according to the Ministry of Education, 17 Russian children have died after they were adopted by American parents and brought to the US.
Ukrainian Journal: Opposition groups to greet Medvedev May 17 visit with protests
Journal Staff Report
| |
|KIEV, May 11 - Opposition groups scheduled their next protest rally for May 17, when Russian President Dmitry Medvedev is due to |
|arrive in Kiev to sign a number of undisclosed deals in the energy sector. |
| |
|“We have to get ready for the powerful rally of patriots on May 17,” Yulia Tymoshenko, a former prime minister and the leader of |
|the largest opposition group, said in a statement on Tuesday. “This is the day when they plan to surrender Ukraine’s interests.” |
12:09
UKRAINE, RUSSIA WILL NOT SIGN ENERGY AGREEMENTS ON MAY 17-18, KYIV SAYS
RBC: Russia, Ukraine to sign border demarcation accord
RBC, 12.05.2010, Kiev 12:25:23.Ukraine and Russia are set to sign an agreement on the demarcation of the state border during Russian President Dmitry Medvedev's official visit to Kiev on May 17, Ukrainian Prime Minister Nikolai Azarov announced at the cabinet meeting today. He called this document - which the previous administration failed to sign during its five years in power - "the most important document."
Azarov indicated that Ukraine had also drafted an agreement on cooperation in the sphere of satellite communications, which would allow the country to attain the most up-to-date technology level in this sphere.
The two countries will also sign a number of documents in the scientific, educational, cultural, banking, and tourist sectors.
Bloomberg: Russia, Ukraine Spy Agencies Forge Closer Ties, Kommersant Says
By Paul Abelsky
May 12 (Bloomberg) -- Russia’s Federal Security Service, the main successor agency to the Soviet-era KGB, and its Ukrainian counterpart plan to sign an accord that will allow the Russian spy service to officially operate in the Crimean Peninsula, where the Black Sea Fleet is based, Kommersant said. Ukraine ejected from Crimea 19 officers of the FSB, as the Russian service is known, in December, the Moscow-based newspaper said, citing officials from both countries. The heads of the two agencies plan to sign the agreement as early as next week, when they meet in Odessa, Kommersant said.
Click here for web link
Last Updated: May 12, 2010 00:47 EDT
RIA: Russian security service officers may return to Crimea
08:4812/05/2010
Russian security service personnel may return to Ukraine's Crimea in the near future as part of a reset in relations between the two former Soviet republics, a business daily said on Wednesday.
Ukraine ordered 19 Federal Security Service (FSB) officers to leave Crimea's Sevastopol, where Russia's Black Sea fleet is based, late last year.
However, victory in February's presidential elections for "pro-Russian" candidate Viktor Yanukovych has led to a dramatic improvement in bilateral ties, which soured under the previous president, Viktor Yushchenko.
Yushchenko had pledged to force the Russian fleet to leave Crimea when its lease expired in 2017. But, under a deal finalized last month, Ukraine agreed to prolong the lease for 25 years in exchange for a 30% discount on Russian gas.
Kommersant said that an agreement to bring the Russian officers back to the base could be signed at a May 19-20 meeting between the heads of the two countries' security services in Ukraine's Odessa. The FSB officers could return within a month of the signing, the paper said.
The move would come as part of a wider cooperation deal between the two security services, the paper said, citing officials at the Russia and Ukrainian foreign ministries.
"Russia raised the issue of the return of the FSB officers to the Black Sea fleet base almost immediately after Viktor Yanukovych's election victory," a Ukrainian diplomat was quoted by the paper as saying.
In another sign of the warmer relations between the two countries, the paper said that a Russian FSB officer detained in Odessa in January of suspicion of espionage could soon be freed.
The paper said talks to bring the officer home had begun soon after Yanukovych came to power. Kommersant did not rule out that the release of the officer, whose identity has not been revealed, may have already taken place.
MOSCOW, May 12 (RIA Novosti)
MEDVEDEV IN TURKEY
Reuters: DIARY - Turkey - to June 24, 2010
WEDNESDAY, MAY 12
* ANKARA - Russian President Dmitry Medvedev and Turkey's
President Abdullah Gul hold joint news conference after signing
energy deals. 0815
*ANKARA - Russian President Dmitry Medvedev and Turkey's
Prime Minister Tayyip Erdogan hold joint news conference after
holding a bilateral meeting scheduled for 0900.
*ANKARA - Medvedev meets Parliament Speaker Mehmet Ali Sahin
at 1315.
*ANKARA - Russia-Turkey business forum hold meeting at 1300.
FRIDAY, MAY 21
MOSCOW - Ecumenical Patriarch Bartholomew of Constantinople
to meet Patriarch Kirill. Until May 31.
VOR: Medvedev to focus on Middle East, energy and trade cooperation in Turkey
May 12, 2010 09:42 Moscow Time
According to the Russian presidential aide Sergei Prikhodko, Russian President Dmitry Medvedev and Turkey’s leaders are due to hold talks in Ankara today to focus on the situation in the Middle East, as well as on energy and trade cooperation. Medvedev arrived in Ankara on Tuesday and met with his Turkish counterpart Abdullah Gül during a working dinner. Today the Russian leader is scheduled to meet President Gül again and also hold talks with Prime Minister Recep Tayyip Erdoğan. The parties to the talks are due to focus on promoting bilateral trade and economic ties, and cooperation in carrying out major energy projects. The two leaders plan to sign a memorandum on cooperation in building a nuclear power plant in Turkey. Last year a Russian-Turkish consortium won the tender for building the facility. The parties to the talks will also discuss in detail the situation in the Middle East, and cooperation in fighting terrorism.
Itar-Tass: Turkey’s Energy Ministry hopes to seal nuke plant deal with Russia
12.05.2010, 00.32
ANKARA, May 12 (Itar-Tass) - Turkey’s Energy Minister Taner Yildiz has expressed the hope that an agreement on the construction of a nuclear power plant will be signed during Russian President Dmitry Medvedev’s visit to Turkey that began on Tuesday.
“There are no negative factors or problems with the Russian side as concerns the preparation of the agreement. We continue to work towards reaching concrete results. I hope that the two sides will take a positive approach and sign the document,” he said.
Russia proposed to build four nuclear power generating units with a total capacity of 5 gigawatt at Akkuyu on Turkey’s Mediterranean coast. The first stone is expected to be laid in November 2010.
The talks on the project have been underway since January.
RFE/RL: Nuclear Cooperation On Agenda As Russian President Meets Turkish Leadership
May 12, 2010
Russian involvement in the potential construction of the first nuclear power station in Turkey is expected to be on the agenda as Russian President Dmitry Medvedev meets with Turkey's leadership today in Ankara.
Medvedev is expected to hold talks with President Abdullah Gul and co-chair with Prime Minister Recep Tayyip Erdogan the first meeting of a new high-level Russia-Turkey cooperation council.
Officials say the Turkish and Russian sides are expected to sign more than 20 agreements -- including gas and oil deals involving Russian energy companies Gazprom and Rosneft, as well as a possible document on a deal for Russian firms to build four nuclear reactors at Akkuyu, on Turkey's Mediterranean coast.
The Russian president arrived in Turkey on May 11 following a visit to Syria.
compiled from agency reports
Worldbulletin: Russia offers joint bank, Turkey wants new quota for meat exports
Russia offered Turkey to set up a joint bank to boost trade between the two countries, Turkey foreign trade minister said on Tuesday.
Wednesday, 12 May 2010 08:41
Russia offered Turkey to set up a joint bank to boost trade between the two countries, Turkey foreign trade minister said on Tuesday.
Following his meeting with Russian Deputy Premier Igor Sechin, Zafer Caglayan told reporters that he was quite positive about Russia's offer.
"Turkish and Russian companies are able to use Turkish lira and Russian ruble in their commercial activities. In this context, it is a very positive offer," Caglayan said.
"I believe a joint Turkish-Russian bank would be very advantageous to boost our trade," he said.
Caglayan also said that Turkey asked Russia to set a new quota for Turkey's white meat exports.
"We want a special quota for Turkey," he said, adding that quota limits would be clear in a few days.
On removal of visa requirements between the two countries, Caglayan described the move as a "milestone" and said that it was a historic decision.
Caglayan also said that cooperation between Turkey and Russia would continue in every sectors from energy to transportation.
On his part, Sechin said that his country was willing to improve commercial ties with Turkey.
He said Turkish and Russian official were trying to reach an agreement on entry of Turkish export goods to Russia, recalling that Sochi port would be shut down permanently.
"Sochi will never be used as a port of loading. That's why, we are trying to reach a decision with our Turkish counterparts," he said.
"If Turkey accepts, we are ready to enhance infrastructure, especially roads and railways. This is important because agricultural products and white meat shipments from Turkey must be processed and reach Russian consumers in a very short time," he said.
Caglayan said Turkish ships would be allowed to use Sochi port until September, and added that Russia would prepare some other ports and logistic centers for Turkish vessels.
However, Caglayan said Turkey and Russia could not reach a consensus on the location of new logistic centers.
Worldbulletin: Turkey, Russia agree to sign agricultural framework deal, protocols
Skrynnik said Russia will import 150,000 tonnes of chicken from Turkey in 2011.
Wednesday, 12 May 2010 08:59
Russian Minister of Agriculture Yelena Borisovna Skrynnik said Tuesday Russia will import 150,000 tonnes of chicken from Turkey in 2011.
Russia currently imports 57,000 tonnes of chicken from Turkey per year.
Minister Skrynnik, as part of the delegation of Russian President Dmitry Medvedev, visited the Turkish Minister of Agriculture and Rural Affairs Mehdi Eker in Ankara on Tuesday.
Speaking to reporters following her meeting with Eker, Skrynnik said that she was pleased to witness developing ties with Turkey.
Thanks to the efforts of our ministries, Turkish exports of food to Russia increased by 14.70 percent in 2009, Skrynnik said.
The relations between our ministries work as the engine of relations among other ministries. The agreements we will sign on Wednesday will promote our relations. We will continue to work with the same spirit, Skrynnik also said.
Mehdi Eker, in his part, said that Turkish and Russian relations developed fast.
Agriculture is the engine of relations between Turkey and Russia. Based on our talks today, we have decided to sign an agricultural cooperation framework agreement and four protocols, Eker said.
We have done what governments could do for the export of chicken from Turkey. The rest is up to the efforts of the private sector, Eker also said.
12.05.10 | 09:50
ArmeniaNow: Three to Tango?: Medvedev’s Turkey visit spurs talk on regional alliances
By Gayane Abrahamyan
ArmeniaNow reporter
Closer Russo-Turkish relations and the latest indications that these relations may grow from economic cooperation into strategic partnership have caused concern among political circles in Armenia.
While there seems to be a relative consensus in Armenia that Yerevan will not yet lose its ‘monopoly’ as Russia’s most important strategic partner in the region, some still urge caution and call on Yerevan to be ready for possible surprises of the emerging Russo-Turkish tandem.
The talk of that sort intensified ahead of Russian President Dmitry Medvedev’s official visit to Turkey on May 11-12 focusing on energy projects and, as announced in the press, addressing some regional tangles, including the Nagorno-Karabakh conflict.As the Turkish press writes, the visit is likely to become a crucial one. And Medvedev himself has stated that “Russia and Turkey are becoming strategic partners.” Turkey, as believed by experts, expects Russia to help it get engaged in the ongoing international mediatory effort on Nagorno Karabakh as part of the OSCE Minsk Group with a far-reaching objective of promoting a settlement of the conflict that would favor its regional cousin Azerbaijan. Also, they say, Ankara hopes that the Kremlin will exert pressure on the Armenians to withdraw from the districts around Nagorno Karabakh currently controlled by the unrecognized republic’s military. Representatives of the governing coalition in Armenia are unanimous that Russia will not make any concessions or moves at the expense of Armenia. “Russia will not imperil its relations with its strategic partner,” Republican Party lawmaker Rafik Petrosyan told ArmeniaNow, invoking the strong bonds that currently exist between Moscow and Yerevan. Meanwhile, many recall history when in 1920-1921 a similar Russian-Turkish rapprochement culminated in a Lenin-Ataturk arrangement that cost Armenia its historical lands of Kars, Surmalu, Ardahan, Nakhijevan and Artsakh (Karabakh). Pro-opposition political analyst Marine Ghazaryan cites Medvedev’s article in the Turkish newspaper Zaman in which the Russian leader voices “deep respect for the great reformist Mustafa Kemal Ataturk” and calls the 90th anniversary of the establishment of diplomatic relations (between Leninist Russia and Kemalist Turkey) ‘an important date’. (Read the full article here: ) “For us it is ‘important’ by the losses [that we suffered],” said Ghazaryan, talking to ArmeniaNow. “And today, 90 years later, the Russians sit down with the Turks to decide our fate, and our authorities see nothing dangerous in it.” Political analyst and Turkey expert Artak Shakaryan also remembers that the ‘Russian-Turkish embraces’ did not have a good outcome for Armenia at the beginning of last century and that one needs to exercise caution. He thinks, however, that the current ‘embraces’ contain no major risk yet. “The Armenian-Russian relations have stronger and deeper roots than the Russian-Turkish relations, and I don’t think that Russia will trade its long-term interests and relations with Armenia for short-term ties with Turkey,” Shakaryan said in an ArmeniaNow interview. However, an expert for the Armenian Center for National and International Studies (ACNIS) Ruben Mehrabyan says that closer Russian-Turkish relations should be definitely a matter of concern for Armenia. “The Karabakh conflict is a powerful weapon for Russia to maintain its positions and influence in the region. However, I do not rule out that one day other priorities will emerge for Russia and in that case Armenia will face serious challenges,” said Mehrabyan, adding that the only way for Armenia to meet these challenges is by becoming a truly democratic country.
News.az: Russian President visits Turkey
Wed 12 May 2010 | 06:03 GMT
Guest President was welcomed at the Esenboga Airport by Energy Minister Taner Yıldız.
Energy and investments will be the major items to be concentrated on at the talks. Yet, matters of regional concern are also high on Medvedev's agenda.
Russian President Medvedev met with Turkish President Abdullah Gul at a special dinner.
A high level cooperation council attended by the ministers will convene for the first time ever, on the occasion of the Russian President's visit.
Giant energy projects, chiefly Samsun-Adana oil pipeline, will be discussed in detail. An agreement on natural gas prices is expected to sign during the talks.
The news that highly debated nuclear power plant agreement will be signed between the two countries, was given by Energy Minister Taner Yıldız, who met Russian Deputy Premiere Igor Sechin ahead of Medvedev's arrival in Ankara at Esenboga Airport early Tuesday.
The visit has a political importance as well.
Turkey is Medvedev's third stop, after Israel and Syria.
During Russian President's contacts in the Middle East, Israel has reportedly asked Russia to assume the mediator role in its talks with Syria, while Syria has pressed to include Turkey in the process.
Another important aspect of Medvedev's visit, is about his delegation. Russian President's official delegation includes Chechnya and Tatarstan Presidents.
TRT Turk Net
Itar-Tass: Russia pledges further counter-terrorism efforts – Churkin
12.05.2010, 03.56
UNITED NATIONS, May 12 (Itar-Tass) - Russia considers dangerous any attempts of establishing political contacts with extremist leaders in Afghanistan and beyond its borders, Russia’s UN envoy Vitaly Churkin told a meeting of the UN Security Council by chairs of the committees on counter-terrorism.
The diplomat urged all states to take measures against the individuals and entities on the consolidated list in compliance with the relevant resolutions.
He expressed concern over the growing links between the Taliban and Al-Qaida in Afghanistan and beyond.
Churkin stressed the key role of the Counter-Terrorism Committee in consolidating and raising efficiency of international efforts towards eliminating ‘black markets’ of weapons of mass destruction.
He affirmed the importance of keeping weapons of mass destruction out of the hands of terrorists.
He pledged Russia’s continued efforts to support these measures and to cooperate with other CIS member-states in that area.
VOR: Russia is concerned over growing terrorist activity by the Taliban
May 12, 2010 04:55 Moscow Time
Tuesday, at the anti-terrorism meeting of the Security Council, the Russian Ambassador to the UN Vitaly Churkin stated that Russia is concerned over the growing terrorist activity by the Taliban in Afghanistan and elsewhere, and calls upon all countries to apply sanctions against terrorists organizations identified by the UN Security Council and placed on its list.
"We cannot fail to worry about the increasing terrorist activities of the Taliban, both inside Afghanistan and beyond. There is no doubt as to the existence of reliable communications and interaction between the Taliban and al-Qaeda.” said Vitaly Churkin. In this regard, he said "Any attempt to establish political contacts with the leaders of the extremists, especially in violation of the sanctions regime is dangerous." At different times statements about the possibility of such contacts have been made by representatives from the Pentagon and the Afghan leadership.
The security situation in Afghanistan has worsened significantly in recent weeks due to a series of attacks and explosions staged by the terrorists. As a result UN staff were forced to evacuate from Kandahar, and last Saturday, the Taliban announced its intention to conduct new attacks. Furthermore, state law enforcement agencies in the U.S. claim that the Taliban may be behind an attempt to stage an attack in New York on May 1.
Somalilandpress: SOMALIA: Russia executed all Somali pirates – spokesman
Somalilandpress | Wednesday, May 12, 2010
BOSASSO (Somalilandpress) — A pirate spokesman, who wished to remain anonymous, contacted Somalilandpress today said at least ten of his men were executed by the Russian navy after the troopers stormed MV Moscow University.
“The Russians commandos stormed the ship before sunrise, starting a firefight with our men, onboard they injured three of them and one was killed,” he said.
He dismissed the Russian navy statement that the men were released because of “the absence of a legal base to carry out prosecution procedures against pirates”.
“The Russians never released the young men instead they shot them point-blank range then loaded their lifeless bodies back on the boat,” he added.
The spokesman condemned the action of the Russian navy “our men never hurt their hostages, we simply want foreign ships to stop over fishing in our waters, if they are not happy to respect our-fishermen and their livelihood, we have no choice but to take hostage to compensate for the losses,” he cited.
“We condemn the action of the Russians, it’s driven by racism and hate for black people and Africa, it’s the face of the new Russia. In future, if we capture Russians they will meet the same fate as those they executed,” he added.
Meanwhile, many Somalis were angered by Somalia’s ambassador to Moscow, Mohamed Handule’s statement, who backed the Russian navy denying that the Russian destroyer Marshal Shaposhnikov has not acted inappropriately. They requested an investigation and the immediate replacement of Mr. Handule.
On the 6th May, eleven Somali pirates hijacked the Liberian-flagged Russian oil tanker, MV Moscow University, carrying 86,000 tonnes of crude oil worth $US52 million in the Gulf of Aden. The anti-submarine destroyer Marshal Shaposhnikov was notified and dispatched a helicopter which disrupted the pirates while commandos on speed boats stormed the tanker. The Russians have killed all eleven pirates and have destroyed their boats according to the pirate spokesman.
There are reports, Somali pirates still hold 23 foreign ships and 384 sailors in Somalia.
Photo: AFP/Pierre Verdy
Russia Today/Rossiyskaya Gazeta: Three approaches to pirates
Why Marshal Shaposhnikov released the maritime bandits. By Yuri Gavrilov
Yesterday’s story of Somali pirates who were captured by our marines during the liberation of the “Moscow University” tanker had an unexpected twist.
Read more
One senior Defense Ministry official was cited as saying that the maritime bandits who were released to freedom by the commander of the “Marshal Shaposhnikov” warship did not make it to shore, and are possibly dead. Rossiyskaya Gazeta (RG) did not get an official confirmation of this version from the ministry. However, the veracity of this information does not raise much doubt.
The released pirates were not, of course, equipped for a sea voyage. The only boat that they had at their disposal had food and drinking water supplies, as well as an emergency beacon. It sends a signal at short intervals, which makes it possible for, say, a pilot who has descended to the ocean, to locate the distressed vessel. It cannot be used for radio communication.
They would also have to act based on the surrounding situation. In a force majeure situation, the beacon works automatically unless it is turned off, then the crew waits for the rescuers to arrive. Either the pirates did not have anyone to wait for, or they decided to rely on their knowledge of the local waters, but already an hour after they were released, the signal was lost. This happened when the nearest shore was at least 600 kilometers away.
Some tried to explain the disappearance of the bandits by claiming malicious intent on behalf of the Russian marine officers, saying that they were enraged by the pirates’ raid and the shootings on the tanker and simply drowned the pirates and told everyone that they released them. This suggestion is, to put it mildly, doubtful. After all, why did the “Shaposhnikov” crew need to invent such a creative plot, when they could have simply destroyed the pirates while freeing the tanker? The pirates decided to use weapons, and the counter-fire was justified from all points of view -- as it would have been justified if the pirates were killed in that fire.
Another issue is related to the equipment on the pirates’ vessel. When it attacked the “Moscow University” tanker, it was fully armed and had a navigation system aboard. Of course, no one was planning on releasing the boat in the same condition they found it, with all the onboard equipment including small arms and satellite GSP systems. The pirates would have probably used all this equipment in future raids. Our marines were simply obliged to seize the items as evidence of maritime banditry.
Now, as for the actual procedure of their release, how justifiable was it? Experts agree that in this case, this was the correct decision. With the absence of a clear international legal mechanism for dealing with pirates, and a special court for “maritime raid” cases, the “Marshal Shaposhnikov” crew had only three choices.
First, transfer the apprehended perpetrators to the authorities of one of the coastal countries: Yemen or Sudan, for example. Recall that this is precisely what was, at one time, done with the pirates by the Russian marines of the patrol ship “Neustrashimy” (“Fearless”). But local authorities are normally fairly reluctant when accepting pirates. This process involves long judicial and diplomatic procedures and does not guarantee that after a certain period of time the pirates will not once again be released to freedom and continue engaging in raids on peaceful ships. If the captain of “Marshal Shaposhnikov” made this choice, the ship would have been permanently stuck at anchorage of one of these African countries, instead of being on an anti-pirate watch in the Gulf of Aden.
The second choice involves redirecting the bandits to Russian territory and trying them by our laws. In this case, however, other legal problems would arise. The attack on the tanker happened in international waters; none of the attackers were Russian citizens. Neither was the vessel traveling under our flag. How should they be tried in this case? Last year’s case of the attack on the “Arctic Sea” was a lot easier. Russian citizens participated in the raid; therefore, it was decided to try them in Russia.
And finally, one last choice remained: to apprehend the pirates, disarm them, examine the tanker, and release the attackers. Moreover, a military investigator was especially directed to the anti-pirate raid on the warship. That is the choice that was made.
Direct Speech
Aleksandr Zvyagintsev, Deputy Prosecutor General of the Russian Federation:
“Russia has consistently, and for a long time, advocated the creation of an international legal body for the prosecution of piracy as a criminal activity. This could be an international court such as the Hague Tribunal. Unfortunately, these proposals failed to translate into practical decisions. A number of countries believe that this would be too expensive; they include the United States, England, and other not-so-poor countries. But despite the persistence of certain politicians, the real threat to the freedom of maritime traffic forces some drastic measures to be taken.
Currently, all the bets are being made on force -- caravans of merchant ships are escorted by warships. If we were to go back to the Middle Ages, then the problem would have a much easier resolution: the captured pirates would be immediately hung on the sail yards. But we are now living in a different time. Therefore, we need to search for a way out of this legal impasse. Many of the leading naval powers know this. For example, we are being actively supported by Spain and Germany. The European Union -- to where one-third on the total fuel supplies travel through the Horn of Africa -- is interested in resolving the problem.
I personally had the opportunity to discuss this subject with the prosecutor generals and their deputies of more than 70 countries. Countries of the CIS, southeast Asia, Latin America, Thailand, Korea, South Africa and a number of other countries all came to a consensus: an international tribunal must be created. This April, issues concerning maritime security became the topic of discussion at the UN Parliamentary Assembly and the UN Security Council. All of this indicates that the international community has turned its face to the acute but not yet resolved problem of combating piracy.”
Updated : 1:00 PM, 05/12/2010
VOV News: Russian press highlights Russian-Vietnamese ties
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Many Russian press and media agencies on May 11 continued praising the development of Russia-Vietnam relations.
Itar-Tass covered the meeting between Russian Foreign Minister Sergei Lavrov and Vietnamese President Nguyen Minh Triet while Mr Triet attended the 65th anniversary of the victory over fascism. Its report stressed that Russia-Vietnam relations are built on friendship and a strategic partnership.
Previously, Itar-Tass had published the full text of the interview with President Triet on bilateral ties.
Meanwhile, Ria-Novosti, Interfax and Moscow’s TVC channel mentioned cooperation projects between Russia and Vietnam.
They focused their news on the groundbreaking ceremony for construction of a Culture, Trade and Hotel Centre named Hanoi-Moscow in the Russian capital city on May 10 in the presence of President Triet and Moscow’s Mayor Luzhkov.
Ria-Novosti quoted Luzhkov as saying that Russia and Vietnam have always stood side by side. The trade turnover between Vietnam and Moscow has constantly increased.
May 12, 2010 11:06
Interfax: Georgian politician flees to S. Ossetia, fears for family's security
TSKHINVALI. May 12 (Interfax) - Malkhaz Gulashvili, the founder of the radical People's Orthodox Movement in Georgia and the owner of the Georgia Times media holding, is in Tskhinvali together with his son and is determined to ensure security of the other of his family members left behind in Tbilisi.
Gulashvili told Interfax he first decided to leave Georgia for Azerbaijan. However, as his son's passport had expired, the two had to travel to their relatives' home in the Dusheti district of Georgia and then to the Leningori district of South Ossetia.
"My son and I spent a night in the Dusheeti district, from which we walked 35 kilometers in the mountains to bypass official border checkpoints," Gulashvili said.
Gulashvili said he is currently focused on providing security to his family, which he claimed is suffering from the Georgian authorities' pressure for his political activities.
"I intend to put my family in a safe place. My wife and my 15-year-old son are in Tbilisi now. My other son is together with me here, in Tskhinvali. I have appeared in Tskhinvali because very strong pressure is being put on my family, and my son has received sexual violence threats," he said.
Gulashvili said he had not yet decided where to move further.
"I have different proposals, including from Austria. But, in any case, I will return to Georgia as soon as I make sure that my family is safe," he said.
Gulashvili is known to be an active supporter of the idea of normalizing Georgian-Russian relations.
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RIA: Transdnestrian journalist admits spying for Moldova
11:0212/05/2010
A Transdnestrian journalist arrested by security forces in the unrecognized republic on charges of spying for Moldova has admitted his guilt.
Ernest Vardanyan, detained on April 7, made the confession in a televised video address.
The journalist said he was recruited by the Moldavian Security and Information Service (SIS) while he was studying at Chisinau State University in 2001. He said that SIS officials had insinuated that he and his wife would face problems with their continued studies in Moldova if he refused.
"I agreed to cooperate with SIS and now I realize I made a big mistake," the journalist said.
Vardanyan said he kept on spying for Moldova after graduating from university and finding work as a journalist in his homeland. He gathered information on Transdnestrian domestic policy, and personally met with top officials, whom he said were sometimes "too trusting".
However, after getting a job at the UN secretariat in 2009, Vardanyan attempted to put an end to his spying career.
"When I told my recruiter Nikolai Botezatu about my forthcoming work at he UN, he said we would not end our cooperation," the journalist said adding that after arriving in New York he continued spying on other countries, especially Russia.
Vardanyan, who faces up to 20 years in prison if convicted on treason charges, said he was not a traitor, but a victim of circumstances.
Transdnestrian State Security Minister Vladimir Antifeev has said Vardanyan "has realized his current condition and has agreed to cooperate with the investigation".
TIRASPOL, May 12 (RIA Novosti)
RFE/RL: Armenian Activists Urge Russia To Help Free Moldovan Journalist
May 12, 2010
A group of bloggers and rights activists have picketed the Russian Embassy in Yerevan to urge Russian President Dmitry Medvedev to seek the release of an Armenian-born journalist jailed in Moldova's Transdniester region, RFE/RL's Armenian and Moldovan services report.
Ernest Vardanean, a 33-year-old stringer for the news agency Novy Region 2, is accused of spying for Moldova and could be sentenced to between 12 and 20 years in prison if found guilty.
The Moldovan government, the U.S. Embassy in Chisinau, the European Union, and the Organization for Security and Cooperation in Europe have urged authorities in the breakaway region of Transdniester to release Vardanean from detention and ensure he receives a fair trial.
Numerous human rights and journalists' associations, including Reporters Without Borders, have also condemned his arrest.
"I consider [Vardanean's] arrest a blatant violation of freedom of speech," said Mikael Danielian, the chairman of the Armenian Helsinki Association, at the Yerevan protest.
The protesters gave embassy officials a letter to Medvedev urging him to use Moscow's strong influence on Transdniestrian authorities to ensure they respect due process in the case. Russia has troops stationed in Transdniester.
The journalist's wife, Irina, also appealed to Medvedev earlier this month. She told RFE/RL on May 3 that intervention by Moscow is the best hope for resolving her husband's case.
The Transdniester region -- which is mainly populated by ethnic Russians and Ukrainians -- broke away from Moldova in 1990 and has been de facto independent since the end of a short war against Moldovan forces in 1992. Its independence is not recognized by any countries.
Itar- Tass: Russia demands investigation of vandalism acts in Germany – FM
12.05.2010, 05.48
MOSCOW, May 12 (Itar-Tass) - Russia’s Foreign Ministry demanded that Germany’s authorities should investigate vandalism against monuments to Soviet soldiers in Berlin, the ministry’s spokesman, Andrei Nesterenko, said.
“It evokes regret that Berlin’s authorities responsible for security of widely visited memorials to fallen WWII Soviet soldiers did not take appropriate measures to prevent evil-minded provocations that throw a shadow on the policy of historical conciliation of the Russian and German people,” the diplomat said.
“This also concerns the lack of prompt actions to eradicate the damage imposed through inscribing insulting words at the monument in Tiergarten,” he said.
He stressed that “an evident political connotation and planned actions aimed at disrupting memorial events that took place in the German capital on the eve of the 65th anniversary of the victory over fascism call attention.”
“Taking into account high-level Russian-German partnership confirmed by German Chancellor Angela Merkel’s participation in the events on May 9 to mark the 65th anniversary of victory in WWII we expect from the German Foreign Ministry and Berlin Senate a careful and comprehensive assessment of what had happened. We also believe that effective measures will be taken to toughen security of WWII Soviet monuments and cemeteries in Germany,” the diplomat said.
Unidentified persons vandalized war monuments in Berlin- Lichtenberg and Berlin- Tiergarten on may 8-9.
“Following the incidents the Russian Embassy in Germany announced a resolute protest in a note sent to the German Foreign Ministry on May 10. It demanded a comprehensive and thorough investigation aimed at detecting those responsible and bringing them to responsibility,” Nesterenko said.
The Engineer: Moscow fusion reactor agreement
Russia and Italy have entered into an agreement to build a new fusion reactor outside Moscow that could become the first such reactor to achieve ignition, the point where a fusion reaction becomes self-sustaining instead of requiring a constant input of energy.
The design for the reactor, called Ignitor, originated with MIT physics professor Bruno Coppi, who will be the project’s principal investigator.
The concept for the new reactor builds on decades of experience with MIT’s Alcator fusion research programme, also initiated by Coppi, which in its present version (called Alcator C-Mod) has the highest magnetic field and highest plasma pressure of any fusion reactor, and is the largest university-based fusion reactor in the world.
Ignitor would be about twice the size of Alcator C-Mod, with a main donut-shaped chamber 1.3m across, and have an even stronger magnetic field. It will be much smaller and less expensive than the ITER (with a chamber 6.2m across), currently under construction in France. Although originally designed to achieve ignition, the ITER reactor has been scaled back and is now not expected to reach that milestone.
The Ignitor reactor, Coppi said, will be ’a very compact, inexpensive type of machine’, and unlike the larger ITER could be ready to begin operations within a few years.
Coppi plans to work with the Italian ministry of research and Evgeny Velikhov, president of the Kurchatov Institute in Moscow, to develop the machine, the core of which is to be built in Italy and then installed in Troitsk, near Moscow, on the site of that institute’s present Triniti reactor.
RIA: Russian missile cruisers complete joint exercises
11:4112/05/2010
The Russian heavy nuclear-powered missile cruiser Pyotr Veliky and guided-missile cruiser Moskva have completed joint exercises and held a traditional farewell ceremony in the South China Sea.
"Today, the heavy nuclear-powered missile cruiser Pyotr Veliky and the guided-missile cruiser Moskva completed the joint transition phase," Captain First Class Sergei Zhuga said.
He said exercises included conjunctive navigation, maneuvering by flagship signal, joint use of weapons, air defense exercises and towing a damaged ship. The crews also controlled the transmission of naval helicopter flights from ship to ship.
Zhhuga said the drills were wide ranging and allowed the ship's crews to raise the professional level of their training.
After completing the drills, the crews carried out a traditional farewell ceremony. The two ships passed each other at a close range and the crews lined up and gave a military greeting.
The Moskva, the flagship of the Black Sea Fleet, left the Ukrainian port of Sevastopol on April 9 for a series of exercises in the Indian Ocean with the Pyotr Veliky of the Northern Fleet.
The two vessels are due to arrive in Russia's Far Eastern port of Vladivostok in June-July to take part in the Vostok-2010 large-scale strategic exercise. The exact date of the drills is yet to be announced.
Russia announced in 2007 that it was building up its naval presence across the world. Foreign port calls by Russian warships have become more frequent.
PYOTR VELIKY CRUISER, May 12 (RIA Novosti)
BarentsObserver: Typhoons will stay in service until 2019
2010-05-12
The two remaining subs of the Typhoon class, the world’s largest nuclear powered submarines, will stay in service until 2019, says Head of the Russian Navy Vladimir Vystosky. The subs are now awaiting overhaul.
Admiral Vysotsky last year announced that the two remaining Typhoon submarines, “Severstal” and “Arkhangelsk”, would not be scrapped, but put back into service. On Friday he said that they will stay in service until 2019, RIA Novosti reports.
- They have good modernization potential, the admiral said. According to RIA Novosti, several ways of modernization are under consideration, but a final resolution has not yet been made.
The two vessels are awaiting overhaul at a naval base in Severodvinsk, Arkhangelsk Oblast.
Three of the originally built six Typhoon-class submarines are scrapped. The decommissioning work on the last of these was completed in the beginning of June 2009, as reported.
The Dmitry Donskoy submarine has been modernized as a test platform for Russia's new Bulava submarine-launched ballistic missile.
The 175 meter (574 feet) long and 24,000 tons heavy vessel is the largest nuclear powered submarine ever built. During the Cold War the six Typhoon-class submarines were based at the naval base in Zapadnaya Litsa, only some 50 kilometers from the border to Norway.
PTI: Russia's new research vessel named after geographer
STAFF WRITER 12:0 HRS IST
St Petersburg, May 12 (Itar-Tass) Russia's new research vessel will be launched at the Admiralty Shipyards in November 2010 and named after distinguished Soviet geographer, Academician Alexei Treshnikov.
The academician had been in charge of scientific expeditions and the Arctic and Antarctic Research Institute for years. Presidential Representative for Arctic and Antarctic International Cooperation Artur Chilingarov proposed to name the new ship after the scholar.
The construction of a new research vessel at the Admiralty Shipyards is on schedule. The Federal Hydro-Meteorological Service ordered the vessel. It will replace the Academician Fyodorov and give support to the Russian Antarctic expedition bring in explorers and cargo, conduct oceanic research, and take away litter from Antarctica.
RIA: Space station crew set to relocate Russian spacecraft
05:2012/05/2010
The crew of the International Space Station (ISS) will relocate on Wednesday a Russian spacecraft docked with the Zarya module to free a docking port for a new research module.
The Soyuz TMA-17 spacecraft will undock from the Zarya module on May 12 at 17.26 Moscow time [13.26 GMT], move away some distance and later dock with the Zvezda module.
"As a result, the spacecraft will make room for the Russian Rassvet [MIM-1] research module which is scheduled to arrive at the station later in May on board the space shuttle Atlantis," a spokesman for the Russian Mission Control said on Tuesday.
Russian cosmonaut Oleg Kotov will pilot the Soyuz during the 28-minute maneuver.
Japanese astronaut Soichi Noguchi and NASA astronaut Timothy Creamer will accompany Kotov while Russian cosmonauts Alexander Skvortsov and Mikhail Korniyenko, and NASA astronaut Tracy Caldwell-Dyson will remain inside the station to monitor the operation.
U.S. space shuttle Atlantis is set to blast off on May 14 from Kennedy Space Center in Florida on its last trip to the ISS.
NASA is planning to scrap its Space Shuttle program by the end of the year. The U.S. space agency says the shuttles are outdated and too expensive to maintain.
The last launch of the U.S. space shuttle Endeavor is planned for mid-November.
Russian Soyuz spacecraft will take U.S. astronauts to the space station after NASA stops launching its shuttles.
MOSCOW, May 12 (RIA Novosti)
Space Travel: Soyuz Consultation Committee Sets Inaugural Launch For Fourth Quarter Of 2010
by Staff Writers
Paris, France (ESA) May 12, 2010
The Soyuz Consultation Committee, comprising representatives of the Russian space agency Roscosmos, the European Space Agency (ESA), the French space agency CNES and Arianespace, met on Tuesday, 11 May in French Guiana. It confirmed that the inaugural launch of Soyuz from the Guiana Space Centre would take place during the fourth quarter of 2010.
The meeting was called to take note of actual work progress on the Soyuz launch pad at the Guiana Space Centre, and to approve the overall timetable for assembly and testing leading up to the inaugural launch.
Nearly all Russian and European systems are now undergoing qualification. The first Soyuz launcher to lift off from the Guiana Space Centre is already assembled in the Preparation and Testing Building.
The meeting of the Soyuz Consultative Committee was co-chaired by Anatoli Perminov, Director of Roscosmos, Jean-Jacques Dordain, Director General of ESA, Yannick d'Escatha, President of CNES, and Jean-Yves Le Gall, Chairman and CEO of Arianespace.
Also participating in the meeting were the heads of the ESA Launcher Directorate, the Guiana Space Centre, the CNES Launcher Directorate, the Samara TsSKB-Progress space centre (prime contractor for the Soyuz launch system), NPO-Lavotchkine (prime contractor for the Fregat upper stage) and TsENKI (prime contractor for ground infrastructures).
With Ariane 5, Soyuz and Vega all deployed from the Guiana Space Centre, Europe will offer a complete range of launch vehicles, enabling it to meet the full range of requirements for all Arianespace customers.
Soyuz at the Guiana Space Centre
The European Space Agency (ESA) set up the programme "Soyuz at the Guiana Space Centre (CSG)" to bolster collaboration with Russia on launch vehicles. The programme is organised as follows:
ESA is the owner and is responsible for the full development of the programme and hands over the Soyuz Launch Complex facilities to Arianespace for its exploitation.
Russian Federal Space Agency (Roscosmos) bears overall responsibility for the programme on the Russian side, and coordinates the activities of the Russian industry involved in the programme.
French space agency CNES is project prime contractor and system architect for the Soyuz launch system at CSG.
Arianespace is responsible for the supply of Russian systems to CSG, coordination and support of the Russian activities for the development phase. Arianespace will be the Soyuz-ST launch operator at CSG for the operational phase.
MAY 12, 2010
Financial Times: Moscow stole from business, claims tycoon
By Courtney Weaver in Moscow
Published: May 12 2010 02:45 | Last updated: May 12 2010 02:45
A self-exiled Russian tycoon facing possible extradition from the UK on Tuesday accused the interior ministry of stealing more than a thousand billion roubles from Russian companies.
Evgeny Chichvarkin, the former owner of Yevroset, Russia’s biggest mobile phone retailer, claimed the interior ministry had fabricated the case against him and appealed to Dmitry Medvedev, Russia’s president, to level serious claims against the ministry’s cybercrimes department.
Mr Medvedev launched a purge of the interior ministry in February, firing 18 senior police officers as part of a drive to root out rampant corruption plaguing the law enforcement system.
In a video posted on the internet Mr Chichvarkin, who fled to London 16 months ago, accused the cybercrimes department of confiscating 1,500bn roubles ($50bn) worth of goods from seven Russian retailers in 2005, and organising a raid to steal $20m of telephones from Motorola’s Russian offices a year later.
Naming 13 individual officials at the ministry who he called “wolves in epaulettes”, Mr Chichvarkin blamed them for the death of Sergei Kozlov, the former head of Motorola in Russia, who died of a heart attack in the months following the Motorola investigation.
The interior ministry declined to comment on Mr Chichvarkin’s accusations.
Moscow is seeking the arrest of Mr Chichvarkin on charges of kidnapping and blackmailing a former employee. Boris Levin, a colleague of Mr Chichvarkin, has been jailed for the kidnapping. Mr Chichvarkin’s extradition hearing is set to take place at the start of August.
In the video, which is posted on Snob.ru, an online magazine, Mr Chichvarkin denied all the allegations against him and his company, claiming the Russian court tried to arrest him illegally.
Exchanging his usual outfit of embroidered jeans, neon sneakers and mullet haircut for a suit and conservative coif, Mr Chichvarkin began the video with a sardonic air, introducing himself to the president as a “temporarily unemployed Russian citizen”. He gradually slips into a darker tone, making a plea for the life of Mr Levin, who he says has contracted hepatitis in prison.
“I ask you to prevent this crime. How many victims must be taken?” he asks, comparing Mr Levin to Sergei Magnitsky, the Russian lawyer who was allegedly denied medical treatment before dying in prison last November.
Less than two weeks ago, businesswoman Vera Trifonova died in a Moscow prison after being told to sleep “standing up”, according to her lawyers. The Moscow prosecutor told the Interfax news service on Tuesday it was investigating Mr Levin’s condition.
Moscow Times: Chichvarkin Names Enemies in a Video
12 May 2010
By Alexander Bratersky
Yevgeny Chichvarkin, the former owner of Yevroset, a mobile phone retailer, has accused 11 senior Interior Ministry officials of harassing his company and intimidating his business associates, and he has asked President Dmitry Medvedev to intervene.
In a video posted on his blog on the web site of the Snob magazine, Chichvarkin called the Interior Ministry's "K" department, which specializes in solving technological crimes, “a gang of werewolves in epaulets responsible for several deaths and the robbery of billions of rubles from Russian companies.”
Chichvarkin said the “gang” is led by the head of the department, Colonel General Boris Miroshnikov, and his deputy, Lieutenant General Konstantin Machabeli.
He said his business partner Boris Levin, who is currently held in pretrial detention as a co-defendant in a case against him, “might be killed in prison like Magnitsky,” referring to the case of Hermitage Capital lawyer Sergei Magnitsky, who died in pretrial detention in November after not receiving medical help.
Chichvarkin, who fled Russia for London in late 2008 after being accused of kidnapping and other charges, listed a number of other crimes that he said were committed by "K" department officials in a bid to subdue and seize Yevroset.
Chichvarkin told The Moscow Times by phone Tuesday that the main reason for his appeal to Medvedev was his concern over the poor health of Levin, who has hepatitis.
“If he weren't sick, I wouldn’t make this statement,” he said.
A spokesman for the "K" department was not available for comment Tuesday. The Prosecutor General's Office said it would look into Levin's condition.
Chichvarkin previously accused department officials of trying to destroy his company in 2006 after the police confiscated 200,000 Motorola cell phones worth $18 million imported by Yevroset.
The Interior Ministry said the phones were smuggled into Russia and did not meet the country's health safety standards.
Dow Jones: UAE Ruler Brokered Deals For Dueling Russian Tycoons –Vedomosti
May 11, 2010
DOW JONES NEWSWIRES
The leader of the United Arab Emirates may have earned as much as $260 million in fees for brokering deals between two Russian businessmen now battling in a London court, daily Vedomosti reports Wednesday.
Details of the transactions involving Sheikh Khalifa bin Zayed al Nahayan, who serves as both UAE president and emir of Abu Dhabi, emerged from documents filed with Britain's High Court, the newspaper says.
Boris Berezovsky, once one of Russia's rich and politically connected " oligarchs" but now living in self-exile in the U.K., has sued Roman Abramovich over claims that the billionaire threatened and intimidated him into selling shares of oil company Sibneft. Abramovich, who denies Berezovsky's accusations, sold Sibneft to state-run OAO Gazprom (GAZP.RS) for $13 billion in 2005.
One of the deals said to involve Sheikh Khalifa was the 2001 sale by Berezovsky and Georgian businessman Arkady "Badri" Patarkatsishvili of their shares in Russia's state-controlled Channel One television for $175 million. Khalifa was an intermediary in the sale, according to court documents.
The other transaction - also from 2001 - included a $1.3 billion payment, the purpose of which is in dispute. Berezovsky told the court he and business partner Patarkatsishvili received the money, in installments, from Abramovich in the allegedly coerced sale of their 43.5% stake in Sibneft. Abramovich insisted the payment wasn't for shares - he claims the pair owned no Sibneft stock to sell - but rather compensation for the men's help with the oil company's privatization and other matters.
According to Berezovsky, payment for the Sibneft shares was made through an entity called Devonia Investments Ltd., for which Khalifa served as guarantor. The exiled tycoon claims this setup was meant to hasten the payment into U.K. bank accounts he and Patarkatsishvili held, and to conceal Abramovich as the ultimate buyer.
Lawyers for Abramovich said Khalifa received a 20% commission from the $1.3 billion deal, or $260 million, though the lawyers didn't say how they knew this.
How the billionaire sheikh, a member of the UAE's ruling royal family who took over as president upon his father's death in 2004, became acquainted with the two Russian businessmen is unclear. Representatives of Berezovsky and Abramovich wouldn't comment, Vedomosti says. Questions sent to Khalifa's office in early April, the UAE Embassy in Moscow and an equestrian-sports organization close to the ruler went unanswered, the newpaper adds.
Representatives of Abramovich, however, say he learned of the dealmaking role played by Khalifa and Devonia only when Berezovsky filed his lawsuit in London in 2007. According to written testimony from Abramovich in the case, the UAE ruler's participation appeared to have been arranged to circumvent U.K. laws against money-laundering.
Newspaper website: vedomosti.ru
-Dow Jones Newswires; 212-416-2900
Bloomberg: Prokhorov’s $200 Million Purchase of Nets Gets NBA Approval
By Curtis Eichelberger
May 12 (Bloomberg) -- Mikhail Prokhorov became the second foreign team owner in U.S. professional sports when the Russian billionaire’s $200 million purchase of the New Jersey Nets was approved by the National Basketball Association.
Prokhorov’s first official act as the Nets’ majority owner will likely come May 18, when the NBA holds its annual draft lottery, giving the team that threatened the league record for fewest wins a chance to restock with a top college player such as guard John Wall of the University of Kentucky.
Prokhorov also has pledged to be active in the free-agent market, where All-Stars LeBron James, Dwyane Wade, Chris Bosh and Amare Stoudemire will be available starting in July. New Jersey is about $26 million below the league’s projected $56.1 million salary cap next season.
“There is only one way to go: up,” Prokhorov told Bloomberg Markets magazine in its May issue. “I like to find cheap assets with problems. It gives me power.”
The 45-year-old Prokhorov, the second-richest person in Russia with a fortune estimated by Finans magazine at $17.8 billion, made his money in gold and metals. Now he is investing in debt restructuring and hybrid cars.
He will own 80 percent of the Nets (12-70) and 45 percent of the Barclays Center in Brooklyn, New York, where the team plans to relocate for the 2012 season. The transactions regarding the team and Barclays Center are expected to be completed today.
‘Business Acumen’
“We anticipate that his passion for the game and business acumen will be of considerable value not only to the Nets franchise but to the entire NBA,” league Commissioner David Stern said in an e-mailed statement yesterday.
Prokhorov is looking for other investment opportunities in the U.S. and owning a professional basketball team gives him immediate name recognition, he said.
“If I want to do something else, people won’t say, ‘Who’s that?’” Prokhorov said. “They’ll say, ‘That’s the owner of the Nets.’”
Prokhorov will be the first owner of an NBA team from outside North America and the second foreign owner of a U.S. franchise. Nintendo of America Inc. is the majority owner of Major League Baseball’s Seattle Mariners.
The approval “will give the NBA a greater global reach and bring a multitude of new fans to the game of basketball,” Prokhorov said yesterday in an e-mailed statement. “For those who are already fans of the Nets and the NBA, I intend to give you plenty to cheer about.”
Mining Sale
The 6-foot-7 Prokhorov sold his 25 percent stake in Russia’s biggest mining company, Moscow-based OAO GMK Norilsk Nickel, in April 2008 for a promised $7 billion in cash and a 14 percent stake in United Co. Rusal, the world’s largest aluminum producer.
In 2008 and 2009, he used his holding company, Onexim Group, to buy distressed assets. He purchased half of Renaissance Capital, one of Russia’s largest investment banks, in September 2008 for $500 million. He increased his stake in OAO Polyus Gold, Russia’s largest gold producer, and now owns about 40 percent of the company with other investors, a stake valued at about $3.7 billion in March.
In Russia, his wealth ranks second after steel magnate Vladimir Lisin, who’s worth was estimated by Finans magazine at $18.8 billion.
Prokhorov purchased the Nets from developer Bruce Ratner, who will make the new arena the centerpiece of a $4.9 billion, 22 acre (9-hectare) office and apartment complex in Brooklyn, which is home to about 330,000 immigrants from the former Soviet Union. Ratner purchased the Nets in 2004 for $300 million from YankeeNets LLC.
The project and move has been held up for six years over legal battles with local residents opposed to the development.
To contact the reporter on this story: Curtis Eichelberger in Washington at ceichelberge@
Last Updated: May 12, 2010 00:01 EDT
MAY 12, 2010
Wall Street Journal: Meet Prokhorov's Fixer-In-Chief
As the Tycoon's Nets Bid Advances, His Basketball Confidant, Sergey Kushchenko, Awaits Orders
By RICHARD BOUDREAUX
MOSCOW—Sergey Kushchenko wore a New Jersey Nets singlet as he dribbled down court in a Moscow gym one recent evening, directing a motion offense against a team of younger guys.
The 48-year-old executive, playing point guard in this informal amateur game, has been passionate about basketball since his youth. His affinity for the Nets is new.
Mr. Kushchenko is a confidant of Mikhail Prokhorov, the Russian billionaire whose offer to buy the Nets last fall was formally approved Tuesday by the National Basketball Association's Board of Governors. He is also a celebrated basketball executive, the man who helped rebuild Moscow's CSKA club under Mr. Prokhorov's ownership into one of the best outside the NBA.
Associates of the two men say their close relationship could make Mr. Kushchenko an influential behind-the-scenes figure in the Nets' future, a low-key consigliere to the flamboyant oligarch owner.
Although Mr. Kushchenko says he will have neither a financial stake nor a formal role in the Nets' organization, he speaks with a proprietary air about his colleague's venture and what he calls their frequent "joint reflections" on it. Both men say their interest in the deal stems from a desire to improve Russian basketball by widening its exposure to the NBA.
"It's an ambitious step, a big challenge for him," says Mr. Kushchenko, who develops sports programs for the oligarch's Onexim Group and helps Mr. Prokhorov run Russia's biathlon program. "Russian experts and clubs will be watching closely how this NBA project develops. It's going to benefit Russian sports."
Mr. Kushchenko has been studying the NBA for 12 years, first as owner of Siberia's Ural Great club and then as president of CSKA, a team he led to two European championships. A former disc jockey who hired an Elvis impersonator to warm up fans for games, he pioneered the notion in Russia that basketball clubs can develop revenue sources beyond the deep pockets of their benefactors and turn a profit. He has brought NBA players to Russia for coaching sessions and made several trips to the U.S. at Mr. Prokhorov's expense to absorb NBA training, management and merchandising techniques.
Now he and his staff are putting their NBA knowledge at Mr. Prokhorov's disposal. "As a future owner, he's analyzing the NBA talent market, and we're helping him," Mr. Kushchenko says. "He's looking for the best in the market. That's how he leads. I assure you that in the shortest time, the best coaches, the best managers will be working for Mr. Prokhorov."
Asked whether the oligarch understands how awful the Nets are (they lost 70 of 82 games last season), the consigliere laughs. "It's better for him when the level is like this," he says, lowering the palm of his right hand to the surface of his desk. "The worse it is, the more room for improvement."
He adds that the Nets can make big strides by acquiring two or three star players.
He says he has some ideas about the Nets' roster and coaching staff but won't share them publicly. He will say that Mr. Prokhorov plans to introduce Russians "little by little" into minor management positions, but won't confirm speculation that Andrei Vatulin, Mr. Kushchenko's understudy and successor at CSKA, will be offered a position in the Nets' front office.
Nets fans won't get many glimpses of the new owner, Mr. Kushchenko predicts. "He attends only the big games. He works on the strategy. He trusts managers; he trusts coaches. Once a strategy is worked out, he doesn't participate."
Will the Nets become Russia's team? "Maybe," he says. "Russians tend to like the Lakers, or the Cavaliers. But that might change if the Nets pick up at least one Russian player."
Seven Russians, including Utah's Andrei Kirilenko, populate NBA rosters. That's fewer than the number of Spaniards, French, Croats or Serbs. The sport is eclipsed in Russia by soccer and hockey, which are more popular and better funded. Some basketball watchers here believe Mr. Prokhorov's move to the NBA will change that.
Others criticize the $260 million purchase offer, saying the oligarch's cash would be better spent developing sports at home. A member of parliament's sports committee, Aslambek Aslakhanov, called the bid "unpatriotic."
Mr. Kushchenko notes that Mr. Prokhorov already invests a lot of money directly in Russian sports. "In Russia we can only gain from his new project," he says. "Our sports managers can learn how marketing techniques work in America and apply them to Russia. Our athletes and coaches can learn the best training techniques. It's an opportunity for everyone who dreams about the NBA, the best league in the world."
Write to Richard Boudreaux at Richard.Boudreaux@
Ynet: Airlines: Russia can't handle competition
Aviation officials explain why Russian plane had to be grounded in order to secure takeoff of Arkia flight from Moscow
Yoav Zitun
|Published: |05.12.10, 09:03 / Israel Travel |
On Monday night the Civil Aviation Authority grounded a Russian plane in Israel following a similar move by the authorities at Moscow airport. Two days later, the airlines caught in the fray wondered how the situation had gotten so out of hand.
In Moscow, 260 Arkia passengers were forced to spend the night at the airport after officials there asked to see the crew's visas, though carrying a visa had been rendered unnecessary almost a year ago. The plane was only allowed to take off after Israel grounded a Russian plane in response.
A senior airline official told Ynet he was not surprised at what had happened. "From time to time the Russian airports create problems for Israeli planes, but this time it crossed the line and the Transportation Ministry was right to take such a rare step," he said.
Another official explained that although Russia and Israel had signed numerous bilateral agreements about the expansion of the flight options between the two countries, many Russian officials were unhappy with the large number of Israeli flights landing throughout the country because it harmed the Russian airlines.
"This is also happening in the Ukraine, and those who suffer are the passengers," the official explained. "The Russian authorities are having a hard time accepting competition and the policy of open skies, and in these agreements they have often tried to expand their own flight rights at the expense of the Israeli airlines. The harsh sanction imposed by Israel proves they only understand force."
Another problem Israeli airline officials face is the matter of obtaining permits for regular flights. In many cases the permits are only granted two or three days before the flights, which created difficulties for the airlines.
In one case, an Israeli plane was forced to return to Russia after takeoff on the false claim that it did not have all the necessary permits. Officials say the tension has worsened since the signing of the visa agreement, which sparked an increase in ticket sales.
"We are familiar with the problem, but we don't know whether it derives from Russian bureaucracy or whether a commercial consideration is behind it," Tourism Ministry official Pini Shani told Ynet.
"This instability is not good for tourism. We want as many Israeli and Russian airlines as possible flying between the countries. Every time there is a new flight agreement or one is expanded there are setbacks, but in the end the Russians always approve the flights at the last minute."
Shani explained that the Russian authorities often ended up hurting their own citizens, since most of the tourists traveling between the countries are Russians vacationing in Israel. He said Tourism Minister Stas Misezhnikov was attempting to quell tensions by making numerous visits to Moscow.
Jamestown: Moscow Grooming a Political Team in Tbilisi
May 11, 2010
Vladimir Socor
Each spring from 2007 to date, Georgia’s radical opposition has linked its regime-change campaigns with a powerful patron, in the hope of counterbalancing the state authorities.
Initially that patron was an internal one the tycoon, Badri Patarkatsishvili, whose resources rivaled those of the state until his death in 2008. In 2009 and this year, however, top opposition figures reached out to the Kremlin for support.
Such a move had seemed unthinkable after almost two decades of Georgian independence. But it became possible after the 2008 invasion, which demonstrated Russia’s ascendancy in the region while failing to achieve regime change in Georgia. This created the basis for Moscow to recruit an alternative Georgian political team, for the eventuality of a regime-change attempt in Tbilisi. From Moscow’s standpoint, any such attempt must not merely present Georgian faces, but some familiar faces that were only recently at the core of Georgia’s political establishment.
Moscow is apparently grooming the former Prime Minister (2005-2007), Zurab Noghaideli, and former Parliamentary Chairwoman (2004-2008), Nino Burjanadze, for such roles, in the event of a Russian-assisted toppling of the Georgian government. In turn, the two are actively positioning themselves for such roles, calling for regime change in Georgia to repair Georgian-Russian relations.
In October 2009 Noghaideli became the first significant Georgian politician to switch sides. He has paid eight visits to Moscow in eight months, by his own count; and has been received demonstratively by Russian Prime Minister, Vladimir Putin, several times. Burjanadze rediscovered the Moscow road slightly later than Noghaideli and is apparently trying to catch up with him. Burjanadze has been granted two meetings with Putin this year.
Noghaideli and Burjanadze attended the May 9, 2010 Victory Day celebrations in Moscow, and were received by Putin again in separate meetings. They also attended the ceremony of laying the foundation stone to the replica of a towering Soviet army monument, to be rebuilt in Moscow following the demolition of the original, 45 meter (150-foot) monument in Georgia (Interfax, May 8, 9).
Russian policy planners apparently contemplate the possibility of a Moscow-oriented “tandem” for Georgia. To Moscow’s added advantage, Noghaideli and Burjanadze are known to distrust each other. From Moscow’s standpoint, these two politicians are well suited to serve as leaders in a Georgia de-aligned from the West. Both Noghaideli and Burjanadze come from the midst of Georgia’s political and business establishments and had promoted Georgia’s Western orientation, before changing course in 2009.
While preparing for political deals with establishment figures, Moscow has not reached out politically to the radical groups active in Tbilisi’s streets. Russian outreach to those radical groups is likely to occur mostly at the covert level, without political deals or honors in Moscow. The only exception thus far is the leaders of the Conservative Party, Zviad Dzidziguri and Kakha Kukava, who have joined the Moscow-oriented camp within the opposition. The party’s conservative label is meant to denote Georgian nationalism, identification with values promoted by the Georgian Orthodox Church, and a critical attitude toward modernization of society. Dzidziguri and Kukava paid their own visit to Moscow in April and met with high-profile, though somewhat eccentric Russian Duma politicians, including Vladimir Zhirinovsky and some communist deputies.
Noghaideli and Burjanadze are positioning themselves as Moscow’s preferred interlocutors in Georgia. They also try to substitute themselves for the Georgian government in terms of “solving problems” with Russia. Thus, Noghaideli tells Georgian and Russian audiences about his purported attempts in Moscow to reopen (“at least partially”) direct airline flights between the two countries, to restore (again “partially”) access for Georgian agricultural products to Russian markets, or to return Georgians to their homes in Kodori and Akhalkalaki (involving a very small proportion of Georgians ethnically cleansed from Abkhazia and South Ossetia, respectively). The message is that politicians agreeable to Russia have a chance to obtain at least some token concessions, and that Georgia could hope for more, if Moscow-oriented politicians come to power in Tbilisi.
Moscow is also using these politicians to tell the Georgian public that Russia may yet facilitate Georgia’s reunification with Abkhazia and South Ossetia in some form, provided that new Georgian leaders demonstrate loyalty to Russia.
On that condition, according to Noghaideli, “such a miracle could happen” under Russian guarantees. As an interim step, Russia’s Duma could arrange for the “realistic” politicians Noghaideli and Burjanadze to hold direct talks with Abkhaz and South Ossetian authorities toward agreements on non-use of force (Civil Georgia, May 4, 8; Ekho Moskvy, Interfax, May 7).
Russia’s message is that Noghaideli, Burjanadze, and others who would follow their example are “realistic” and “responsible” politicians, who realize the futility of Georgia’s Western orientation and seek to reestablish “traditional ties” with Russia. However, Noghaideli and Burjanadze cannot offer more than illusions to Georgia. Their political rating is in the low single digits, and they have no organizational base or even political “teams” to speak of in Georgia for the time being. However, Russian resources could address these problems for them.
Source:
RusBizNews: Russian Tank Falls Victim to Intrigues
12.05.2010 — Analysis
The Corporation "Uralvagonzavod" intends to feature the new T-95 tank at the Russian Expo Arms -2010 Exhibition. The plans can be thwarted by the RF Ministry of Defence whose representatives announced winding up R&D efforts in this field. Instead of the T-95 that had become obsolete before it saw the light, the military offer to focus on the further upgrading of the T-90 production model. Experts see such an approach, to say the least, as questionable. However, as the RusBusinessNews observer has found it out, the debates are nothing but squaring the circle, as the debts of Uralvagonzavod, in ruble terms, amount to dozens of billions and the production is hopelessly outdated.
The State Armaments Program for 2007-2015 sets out the plans for delivery of 630 upgraded tanks and 770 breakthrough tanks to the Armed Forces of Russia. The rearmament is scheduled to start in 2011. By this very time, OJSC "Ural Transport Engineering Design Bureau" (a member of OJSC "Research and Production Corporation "Uralvagonzavod") promised to bring in the fourth-generation main battle tank T-95 and an improved version of the T-90 with a new turret, gun and enhanced fire-control system.
In April 2010, it became clear that the program was going to fall short. Vladimir Popovkin, Deputy Minister of Defence, told journalists that it was decided to cease T-95 development, as over the twenty years spent on its design the tank became hopelessly outdated. The question about whether any funds will be allocated for development of a state-of the-art fighting vehicle remained unanswered. The representatives of the developer state that they have no funds for R&D.
Manufacturers have also missed the target to supply the army with upgraded tanks: the improved version of the T-90 will not be ready until late 2010. It means that at its best, Uralvagonzavod will be able to manufacture 630 tanks in six years - provided that all export contracts are cancelled. Export deliveries are unlikely to be discontinued, since there are countries that are willing to buy the Т-90. However, manufacturing capacities are insufficient to sustain tank deliveries both to the Russian Army and to foreign customers.
The decision to wind up the "project 195" (Т-95) came to the expert community out of the blue. Just one month before, Vladimir Goncharov, a representative of the RF Ministry of Defence, made a statement at the meeting of the Sverdlovsk Union of Defence Industries that theT-90 was a yesterday's vehicle; and not to be left empty-handed, Uralvagonzavod should without further delay go ahead with a design of a new generation tank. The impossibility to upgrade basic combat qualities of the military equipment developed in the 70s was noted by other top-rank officers of the Russian Army.
Alexander Khramchikhin, head of the Analytical Department of the Institute for Political and Military Analysis, assumes that the Т-95 could happen to be a victim of intrigues - big-business, rather than politics. The bottom line of these back-door maneuvers, however, is totally unclear, as the T-90 has undoubtedly had its day.
Andrei Frolov, a research associate of the Center for Analysis of Strategies and Technologies, suggests that General Popovkin might have meant: the T-95 project is not being shut down; it will be suspended until the development of a 1,500 hp engine and number of other components has been completed. The 1,000 hp engine used for the T-90 is obviously not powerful enough for the new tank. However, the expert thinks that even if the Deputy Minister of Defence meant exactly what he said, his statements should be perceived with great care: another general will come over, and the attitude may change.
According to A. Frolov, there is another problem: Russia is still unable to decide what kind of war it must be ready for. The expert reckons that local conflicts can be handled with the upgraded T-90; that is the reason for its stable demand in a number of Asian countries. The export potential of this tank has not been exhausted: Libya, Turkmenistan and a number of other countries show interest in it. Participation in a global modern warfare will require a fundamentally different approach to development of new weapons and equipment. The former policy - the one who has thicker armor and more powerful gun will be the winner - is no longer on the agenda. Without air defense being integrated in the battle management system, the most advanced tank turns into an easy mark for the sophisticated enemy. Therefore the industrialized countries put an emphasis on the systems that can protect fighting vehicles from homing missiles.
Russia cannot boast that it succeeded in computing and destroying detection and guidance systems of antitank weapons. Thus, it is not ready for a global warfare. However, the desire to join the ranks of highly developed countries exists - at least, to be on the world armament market. Insufficient funds for R&D, however, drive the Russian military to the bottleneck of continuous choice between preparation for a local or a global war. Lack of military strategy makes it extremely difficult to answer the question: what tank the Russian Army needs. It adds to the problems and troubled times Uralvagonzavod is going through.
The enterprise that used to manufacture up to 1,200 tanks a year in the Soviet Union times keeps living today mainly on civilian industry products. When the crisis broke out, the construction machinery manufactured at the factory encountered lack of market demand, and Russian Railways JSC set strict requirements to railcar quality. At the end of 2008, the factory delivered 284 gondola cars equipped with new trucks. In 2009, Russian Railways ordered 1.5 thousand gondola cars; however, according to the press service of Uralvagonzavod, the crises put off their purchases. Only 305 gondola cars were manufactured. The traditional rolling equipment was not selling well. Uralvagonzavod faced acute shortage of orders. In 2009, the company debt reached 66 billion rubles, making the company lose 30 million rubles a day to service the debt and accrued interest. In April 2010, as Oleg Sienko, General Director of Uralvagonzavod, states, the debt shrank to 26 billion rubles, but the problem with orders still exists - including orders for military products.
Sergei Perestoronin, head of the Rosoboronzakaz representative office in the Ural Region, said that within the first two years, Uralvagonzavod fulfilled almost all its obligations under the three-year contract for delivery of 189 tanks to the Russian Army scheduled for the 2008-2010 period. The new contract that is also most likely to be scheduled for three years has not yet been submitted to the representative office. Consequently, money has also not come, though the Russian government promised to transfer up to 80% of funds required to fulfill the state defense order in the first quarter of the year.
Andrei Frolov believes that the money, in one form or another, will come to Uralvagonzavod, and the factory will make 100-120 tanks in 2010. This quantity will not in any way change the situation in the Russian Army. Alexander Khramchikhin has no doubt that nobody is going to implement the State Armaments Program for 2007-2015; thus, it is absolutely impossible to say what kind of a state defense order Uralvagonzavod will receive.
The position of Uralvagonzavod became even fuzzier after the RF Ministry of Defence had required reducing the cost of weapons and military equipment by 15%. At the same time, steel-makers announced an overall average 20% increase in the prices for their products. Oleg Sienko told journalists that the factory would have to lay off the personnel to cut costs.
Today, the factory has to pay 8 billion rubles a year under its loan obligations; thus, implementation of investment projects has become extremely complicated. The Uralvagonzavod production facilities are totally outdated: even painting operations are done manually. At the moment, Uralvagonzavod "is grinding out" the installation of a new painting line and is replacing individual machine-tools where it is imperative. The General Director of the factory claims that the "band-aid" approach is not sufficient to remedy the situation: the entire production must be built on a new concept.
At present, the focus is shifted to projects for profound modernization and expansion of the existing metallurgical facilities. The green-field project to build facilities from the ground up is considered an option, as the poor quality casting results in sizeable expenses and lost markets for the factory. However, the problem is lack of money required for the project. The government money is slow-paced: 10 billion rubles promised by Russian Premier Vladimir Putin back in September 2009 arrived at the Uralvagonzavod account just recently.
Interestingly, but it was ill-timed financing of R&D that overextended the development of the new generation tank and made the T-95 no longer required.
Vladimir Terletsky
Itar-Tass: Medical products’ warehouse on fire in Vladimir suburb
12.05.2010, 08.56
MOSCOW, May 12 (Itar-Tass) - Medical products’ warehouse is on fire in a suburb of the city of Vladimir, Itar-Tass was told at the Russian Emergency Situations Ministry.
“The fire started in a warehouse where medical products are stored, the area of the conflagration is increasing,” an emergencies official said. According to him, bursts are heard at a distance of 300-500 metres form the burning warehouse, because, according to preliminary information, small explosions may take place inside.
Fire fighting teams are working at the incident site. There have been no reports about casualties.
VOR: Press review
May 12, 2010 12:20 Moscow Time
The Russian printed press is focused on Dmitry Medvedev’s visit to Syria. The “Rossiyskaya Gazeta” daily points out in an article that this is the Russian leader’s first visit to the region where the world community has been doing its best to reconcile Israel with its Arab neighbours. Recently Moscow has stepped up its mediatory efforts in a Middle East settlement. The Kremlin played host to a spate of Mid-Eastern delegations, including the Israeli Prime Minister Binyamin Netanyahu. Russia is still planning the hosting of a Moscow conference on the Middle East, a plan that has on the whole generated approval form both fellow-mediators and the parties to the regional conflict.
Reporters of the Moscow-based daily Moskovsky Komsomolets have asked several experts to comment on the Raspadskaya coalmine blast, while the official inquiry into the accident is going on. All experts agree that it was impossible to avert the disaster. For example, the director of the Promgaz technological research centre Yefim Kreinin believes that the coal shearer used had most likely bitten into a large amount of free methane amid the coal layer. It is plain impossible to spot this kind of gas accumulation in advance.
Demand for gas in Russia and Europe has been steadily on the rise since January, the RBC Daily quotes Gazprom’s CEO Alexei Miller as saying. Gazprom has increased exports by 50% and is planning to reach pre-crisis levels by 2013. The domestic market has been showing stable growth and has already surpassed 2008 levels.
Brussels may come up with a “road map” for visa-free travel for Russians at the May 31 EU-Russia summit in Rostov, the Gazeta newspaper reports. The “road map” will specify the customs and border safety reforms Russia will need to carry out. The mandatory measures include biometric passports and a law on data protection.
The security agencies of Russia and Ukraine are planning to push a “reset button” to mend their ties that suffered a dramatic setback under the Yushchenko regime. A protocol on cooperation between Russia’s FSB and Ukraine’s SBU agencies is being prepared. It means that Russian intelligence officers will return to the Black Sea Fleet. Last December, 19 FSB officers ensuring the safety of Navy staff at the fleet’s base in Sevastopol were ordered to leave Ukraine.
National Economic Trends
Bloomberg: Russia Faces Massive Capital Influx on Low Debt, Dmitriev Says
By Maria Levitov
May 12 (Bloomberg) -- Russia faces a “massive” capital influx as investors look for alternatives to Europe’s crisis- ridden debt markets, said Mikhail Dmitriev, president of the Center for Strategic Development.
That’s putting pressure on Russian policy makers to implement capital controls soon to stem the flows and avoid ruble volatility, Dmitriev, whose think tank conducts research for the government, said in an interview in Moscow yesterday.
“The government is unarmed against the distortions that may result from massive capital inflows,” said Dmitriev, who is also a former First Deputy Economy Minister. “Russia’s balance of payments and internal macroeconomic stability would undoubtedly be at risk.”
The country’s sovereign debt stood at 9.8 percent of gross domestic product last year, compared with an average rate of 78.7 percent in the euro area. Russia was able to finance stimulus measures with oil revenue after Urals crude, the country’s chief export blend, soared 83 percent last year. Credit default swaps on Russian five-year debt have averaged the same as CDS on Italian bonds since the middle of April.
In the current situation “some steps to contain the most volatile elements of capital inflow may be taken,” Dmitriev said.
Russia is considering restrictions on capital flows that would penalize investors with horizons shorter than three years, First Deputy Prime Minister Igor Shuvalov said in London yesterday. Investors holding Russian assets for more than three years should have a “privileged status,” he said.
‘Abundant Liquidity’
That puts more pressure on the government to make long-term holdings attractive and requires stable prices, according to economists at VTB Capital, a unit of Russia’s second-largest bank.
“Under the current abundant liquidity conditions, the success of these measures will to a significant extent be determined by the rates offered, suggesting that the government’s near-term focus will be on controlling inflation while allowing ruble flexibility,” VTB economists Aleksandra Evtifyeva and Dmitry Fedotkin said in a note to clients today.
Inflation will average 6 percent to 6.5 percent by the end of the year, Shuvalov said yesterday.
Russia’s oil wealth is reducing the country’s foreign borrowing need as revenue from oil and gas fills state coffers. The government may cut foreign borrowing plans by $13 billion this year, Deputy Finance Minister Dmitry Pankin said last month. The final figures will depend on the size of this year’s budget deficit, which might shrink to about 3 percent of gross domestic product from an estimated 6.8 percent, according to Pankin. The shortfall reached 5.9 percent of GDP last year.
EU Rescue
In contrast, Greece’s budget deficit in 2009 reached 13.6 percent, more than four times the European Union limit. The euro area’s average deficit is estimated at 6.6 percent this year, the European Commission said on May 5. The region’s widening shortfalls have contributed to a 16 percent slide in the euro against the dollar since a Nov. 25 high.
Investors are concerned that an EU rescue package worth almost $1 trillion unveiled over the weekend may not be enough to prevent the crisis from spreading to other countries including Spain and Portugal.
Russia’s central bank, which has “sharply reduced” the extent to which it steers the ruble to lessen the effects of currency moves on producers, still prioritizes currency stability over inflation, according to Bank Rossii Chairman Sergey Ignatiev. Ruble controls force Russia to rely heavily on its foreign currency reserves, complicating the regulator’s efforts to stem inflation.
Impede Efforts
High capital inflows would impede the regulator’s efforts to keep inflation from accelerating, Dmitriev said. The inflation rate dropped to an annual 6 percent last month, the lowest level in 12 years.
Russian equity funds had net inflows for the 12th week in a row in the week ended May 5, gaining a net $26 million, EPFR Global data show. That compares with a net capital outflow of $52.4 billion last year when oil prices dropped and foreign direct investment plummeted 41 percent. In 2008, Russia a record outflow of $130 billion.
The International Monetary Fund urged Russia to consider “all lines of defense against excessive inflows -- macroeconomic and prudential policies as well as capital controls,” in a report published yesterday.
Control measures outlined by Shuvalov yesterday may involve differentiated reserve requirements for banks, rather than a new tax or currency regulations, he said.
“Differentiating reserve requirements for banks’ domestic and foreign liabilities and limiting foreign borrowing by state companies is preferable for Russia, rather than instituting an all-out ban or taxing capital inflows,” Dmitriev said.
To contact the reporter on this story: Maria Levitov in Moscow at mlevitov@
Last Updated: May 12, 2010 03:36 EDT
2010-05-12 07:23
Reuters: Russian bank balances rise to 476.7 bln rbls
MOSCOW, May 12 (Reuters) - Banks' balances in their correspondent accounts at the Russian central bank rose to 476.7 billion roubles on Wednesday from 456.6 billion roubles in the previous session, the central bank said.
All figures are in billions of roubles
BALANCES May 12 May 11
Total 476.7 456.6
Moscow region 321.2 309.1
Banks' deposits at the central bank 930.5 941.3
NOTE - Correspondent account balances are an indicator of Russian banks' liquidity. Keywords: RUSSIA BALANCES/ (Moscow Newsroom, +7495 775 1242, moscow.newsroom@)
12.05.2010 - PRIME-TASS via Banki.ru
CBR: Russia’s foreign trade surplus leaps 2.5x in Q1
In the January-March quarter of 2010 a surplus of Russia’s foreign trade balance equaled $47.004 bln, up an impressive 2.5 times compared to a $18.78 bln surplus a year ago, data compiled by the Central Bank of the Russian Federation on the basis of the payment balance methodology show.
In Q1 Russia’s exports totaled $92.55 bln or 61.6% more than in the same period a year ago. Imports jumped 18.4% to $45.55 bln.
RenCap: Foreign trade statistics: Imports recover strongly in March
Renaissance Capital
May 12, 2010
Yesterday (11 May), the Central Bank of Russia (CBR) reported foreign trade statistics for March. Exports reached $33.6bn, imports surged to $18.7bn, and the corresponding trade balance fell to $14.9bn. Imports and exports strengthened for the third month in a row and have returned to the levels last seen at the end of 2009.
Federal Customs statistics indicate that March's 9.0% MoM increase in exports was mainly driven by oil exports, chemicals, and the metals and mining sector. The oil price was favourable for Russian exports as it rose past $75/bbl;
however, gas exports fell, which partially compensated for the rise in oil exports. As most metals and mining companies usually sign short-term contracts closely related to the current market price for metallurgical production, the recent spike in global steel prices boosted the contracted prices for their export products. Coupled with an increase in the nominal exports of those products, this factor explains the 25% surge in metals and mining exports.
The foreign trade statistics also showed that imports recovered at a faster pace than exports. Imports rose 20.9% MoM and returned to the level last seen in Oct 2008, on the back of a recovery in demand and consumer confidence. Imported cars were among the main beneficiaries. We think the continuously rising inflow of cars (supported by reviving consumer lending) and chemicals is likely to be offset by a further fall in food imports, which reach their seasonal peak in the winter when domestic production of some food categories (especially fruits) is limited. The latest comments from CBR officials and the recently released preliminary import statistics for April support our view that this pick-up in imports is likely to continue, but will slow to less than 5% MoM.
12.05.2010 - RBC
Shuvalov: ruble is expected to appreciate in the mid term
First vice PM Igor Shuvalov expects the Russian currency to strengthen positions in the mid-term outlook. He made this statement on Tuesday in London at a conference devoted to the investment potential of the BRIC bloc (Brazil, Russia, India and China).
Over the past twelve months the ruble firmed tangibly against the dollar, although at the end of last week the ruble slightly weakened. The vice prime minister noted further appreciation of the national currency will create problems for many industries of the Russian economy, Reuters reported.
The first vice prime minister reported about the Russian investment climate to several hundred businessmen and investors from various countries who arrived in the UK to attend the conference. Shuvalov thinks the investment climate in Russia is changing and is changing for the better.
VTB Capital: Authorities want to spur longer term investments into Russia
VTB Capital
12 May 2010
Highlights attempts to improve investment climate - Deputy Prime Minister Igor Shuvalov sees stronger RUB in the medium term - might suggest low inflation is key priority
News: According to Kommersant, First Deputy Prime Minister Igor Shuvalov said yesterday that the government wanted to spur longer term investments into Russia, with one of the options being a preferential reserve requirements regime for banks that attract long-term investment financing (a similar regime was introduced in October 2008 and is due to expire on 1 July 2010). Shuvalov said that the authorities “would like to create more privileged conditions for those who invest into the Russian economy for at least three years.” He added that the RUB would continue to appreciate in the medium term.
Our View: Shuvalovs comments were rather contained, yet we think that they need to be interpreted from the authorities point of view. In other words, that they are focused on making long-term investments a more attractive option, rather than imposing major restrictions on short-term capital flows. In our view, under the current abundant liquidity conditions, the success of these measures will to a significant extent be determined by the rates offered, suggesting that the governments near-term focus will be on controlling inflation while allowing RUB flexibility.
We agree that, from the fundamental viewpoint, there is still room for further RUB appreciation. Once the current turbulence is behind us, we see the rouble appreciating towards the end of the year, to 28.13 against the US dollar and 31.93 against the basket.
Moscow Times: State Sees Capital Controls This Year
12 May 2010
Combined Reports
The government wants to introduce capital controls by December on investments shorter than three years as the government tries to limit ruble volatility, First Deputy Prime Minister Igor Shuvalov said Tuesday.
“We want to have a more privileged status for those who want to keep money in our economy for longer than three years,” Shuvalov told reporters in London. “We must do it this year, by the end of this year, because the ruble is again appreciating. We need to impose these rules as soon as possible.”
The International Monetary Fund said Tuesday that Russia must mull capital controls to defend against excessive inflows, and identified the area as one of the key challenges facing policymakers.
“Managing capital inflows is one of the key challenges facing the Russian authorities,” the IMF said in a report published Tuesday. “All lines of defense against excessive inflows — macroeconomic and prudential policies as well as capital controls — should be considered.”
The authorities must also keep inflation low by allowing greater flexibility in the exchange rate, which would discourage speculative capital flows, according to the IMF.
“Prudential regulations must be shored up to limit the risk of credit booms” including countercyclical capital requirements, restrictions on foreign currency lending and differentiated reserve requirements, the IMF said.
The ruble has gained 8.3 percent since a July 13 low as Urals crude advanced 28 percent in the same period, with the currency’s appreciation threatening to hamper Russian exports.
"The ruble is broadly in line with the current macroeconomic indicators," Odd Per Brekk, the IMF's senior Russia representative, told reporters.
"Absent any further substantial appreciation, we don't see a basis for taking extraordinary steps at this stage to prevent further ruble appreciation."
Shuvalov said there was “not much” that policymakers could do to stem the currency’s ascent in the medium term. Investors who “just come over, use the exchange rate [and] our inflation problems and disappear” should face an investment climate that is “not very good,” he said.
The Central Bank will not be able to switch to an inflation targeting regime for about “two to three years,” Shuvalov also said. Inflation will probably be 6 percent to 6.5 percent by the end of this year, he added.
Central Bank Chairman Sergei Ignatyev said last month that the bank should shift toward inflation targeting in 12 to 18 months.
Inflation targeting won’t be possible as long as Russia is using funds from its reserves to buoy the economy, Shuvalov said Tuesday.
Russia posted an estimated net capital outflow of $52.4 billion last year when oil prices dropped and foreign direct investment plummeted 41 percent. The nation saw a record net outflow of $130 billion in 2008, following a record net inflow of $83 billion a year earlier.
(Bloomberg, Reuters)
Business, Energy or Environmental regulations or discussions
Bloomberg: Gazprom, Tatneft, Polyus, Raspadskaya: Russia Equity Preview
By Yuriy Humber
May 12 (Bloomberg) -- The following companies may have unusual price changes in Russia trading. Stock symbols are in parentheses and share prices are from the previous close.
Russia’s 30-stock Micex Index posted its biggest gain in four months, advancing 3.5 percent to 1,334.15. The dollar- denominated RTS Index added 4.1 percent to 1,420.54.
OAO Gazprom (GAZP RX): Russia’s natural gas export monopoly said sales to Europe grew in the first four months as demand rose, Interfax reported, citing Chief Executive Officer Alexei Miller. The U.K. is buying 50 percent more gas from the company this year and sales are up 40 percent in other European Union countries, the news agency reported. Gazprom gained 3.1 percent to 159.91 rubles in Moscow on the Micex Stock Exchange.
OAO Tatneft (TATN3 RX): The oil producer hired Citigroup Inc. and Royal Bank of Scotland Group Plc to arrange bond investor meetings in the U.S. and Europe, according to people with knowledge of the roadshow. The meetings will start May 12, the people said. Tatneft fell 5 percent to 130.64 rubles in Moscow on the Micex Stock Exchange.
OAO Polyus Gold (PLZL RX): Gold approached a record in New York as a haven amid escalating European-debt concerns. Russia’s largest gold producer rose 0.4 percent to 1,362.03 rubles in Moscow on the Micex Stock Exchange.
OAO Raspadskaya (RASP RX): Russia’s biggest coking coal supplier had its biggest drop since listing two years ago after its Chief Executive Officer Gennady Kozovoy said it will take “years” to rebuild its main asset after an accident. Raspadskaya fell 23 percent to 131.89 rubles in Moscow on the Micex Stock Exchange.
To contact the reporter on this story: Yuriy Humber in Moscow at yhumber@
Last Updated: May 11, 2010 22:00 EDT
Bloomberg: Russian Coal Mine Outage Unlikely to Hit Global Market, UBS Says
May 12, 2010, 2:24 AM EDT
By Stuart Wallace
May 12 (Bloomberg) -- Damage to OAO Raspadskaya’s biggest mine, which supplies coal to steelmakers, is unlikely to “significantly” affect the global market because of Russia’s share of seaborne trade, UBS AG said in a report.
The mine has a capacity in excess of 8 million metric tons a year, representing more than half of the company’s capacity and about 10 percent of Russian output, the bank said.
“Russia’s share of the global seaborne market amounts to only 6 percent, hence we believe the accident is unlikely to significantly affect global balances,” UBS said. “The impact could be relatively more significant for Ukraine which gets more than 50 percent of its imports from Russia.”
The death toll from explosions at the mine in Siberia over the weekend reached 60, the Emergency Ministry said on its website today.
To contact the editor responsible for this story: Stuart Wallace at swallace6@
Dow Jones: Raspadskaya Faces Huge Costs From Blast-Damaged Mine –Vedomosti
Publié le 12 Mai 2010
- DOW JONES NEWSWIRES
The deadly blasts that damaged the main mine of Russian coking-coal producer OAO Raspadskaya (RASP.RS) last weekend will take several years to fix, but the company may have less money for the repairs, business daily Vedomosti reports Wednesday.
As of Tuesday, the death toll from the disaster had risen to 52, with 38 other miners missing, Russian news agencies said.
The operator of the Siberian mine hasn't stated the cost of the damage, but Chief Executive Gennady Kozovoy told Prime-Tass that company experts estimate the repairs will take several years. Raspadskaya may have to bear the cost alone, Vedomosti notes: According to its 2009 annual report, the company wasn't insured against civil liability or losses of major equipment.
On the RTS stock exchange Tuesday, Raspadskaya shares closed down 26.5% in a sell-off that also meant a loss in the company's capitalization of $889 million, to $3.36 billion from nearly $4.25 billion.
A top manager of another coal company told the newspaper that if Raspadskaya's mine has to be rebuilt, the cost could total $600 million to $700 million. If the damage is limited, the price tag could be $150 million to $250 million to replace equipment and repair the mine's infrastructure, he said, although flooding in the mine would push the cost much higher.
If the mine remains out of service for the rest of this year and Raspadskaya doesn't increase production at other sites, the company's 2010 revenue could fall by more than 40%, to $550 million to $600 million, said Boris Krasnozhenov, a mining and metals analyst for brokerage Renaissance Capital.
Analysts agreed that the disaster is likely to cause a shortage in Russia of coking coal, which is used as a fuel and to produce steel. The Raspadskaya mine accounts for 13%-14% of the country's output, according to Citigroup Inc.
Newspaper website: vedomosti.ru
-Dow Jones Newswires; 212-416-2900
Moscow Times: Privatization to Get Information Support
12 May 2010
By Maxim Tovkailo / Vedomosti
A high level of informational support will be needed for privatization, according to the Federal Property Management Agency, which is writing letters to investors, inviting them to presentations and even creating a call center for them.
The agency wrote to Economic Development Minster Elvira Nabiullina offering to improve the privatization mechanism, and a copy of the letter was obtained by Vedomosti.
Some of the proposals already are being implemented: The State Duma approved, in a first reading, amendments that would allow the government to adopt a three-year plan for privatization, and the government is reviewing legislation that would enable investment banks to sell government property. Soon, a list of assets that the state is prepared to sell in the medium term will be made public.
Successful privatization is impossible without a large-scale informational campaign, the letter says. The property agency wants to publish investment memorandums, create a call center for investors, write letters and hold road shows and presentations for the sale of large assets.
Market analyses will be needed, and investors will be sought for every enterprise. All of this will require independent investment consultants, the agency says.
Before, it was a seller's market, but now it's a buyer's market. It is necessary to compete for investors and to understand their requirements, said Ivan Aksenov, head of management for the property agency. "The state is interested in strategic investors, who are able to develop the enterprise," he said.
Before the crisis, investors often viewed enterprises that were going to be privatized as speculative assets, he said. "You could buy an idled company and in half a year sell it and make money on the appreciation of the real estate alone," he said.
The property agency is offering to prepare enterprises for sale in advance. Their reports should correspond to the real state of affairs, and property rights should be registered in a proper manner. Investors should also be able to pay in installments, carry out due diligence and work with banks to get financing using the asset as collateral.
The Economic Development Ministry supports the agency's idea, a ministry official said. "We gave the agency an order to strengthen the informational support for privatization," he said.
Calls to ministry spokesmen went unanswered.
These are intelligent ideas, a Cabinet official said. "It's effective positioning; advertising can increase the sales receipts," he said.
The Duma is considering amendments to the law on privatization that would allow part of the revenues fr om the sales of state property to go toward such measures, he said.
In former socialist countries, wh ere privatization is being actively carried out, the necessity of informational support and continuous contact with investors was recognized a long time ago, said Andrei Stepanenko, head of the St. Petersburg Property Fund. Presentations of the fund's assets will be held nine months before their sale, Stepanenko said. Investors need half a year for due diligence.
“If large assets are put up for sale, and they are properly advertised, then the revenues from privatization will be a serious support for the budget," said Yevgeny Yasin, scientific director of the Higher School of Economics. But the property agency has to convince investors not only of the attractiveness of the asset, but also that they can do business with the state, he added.
RIA: Russia's State Duma to consider luxury tax bill – paper
12:3112/05/2010
Russian lawmakers are discussing a controversial luxury tax amendment to the country's Tax Code, a government daily said on Wednesday.
The Rossiiskaya Gazeta paper said the legislation defined several groups of luxury items on which taxes would be increased.
As well as real estate assets worth over 15 million rubles ($500,000) cars costing more than two million rubles ($67 million), and planes, helicopters and yachts would also be classed as luxury items for tax purposes.
So-called minor luxury items include precious stones, metals, animals and birds worth over 300,000 rubles ($10,000).
The authorities want both companies and individuals to pay for luxury assets to avoid individuals "transferring" items to companies in order to avoid the tax.
However, the new legislation would cause double taxation in some cases as taxes are already paid upon the purchase of an apartment of a car, the paper said.
MOSCOW, May 12 (RIA Novosti)
Bloomberg: Toyota, GM Say New Russia Rules Threaten Output, Kommersant Says
By Paul Abelsky
May 12 (Bloomberg) -- Toyota Motor Corp., General Motors Co. and Nissan Motor Co. may halt Russian production after the country’s Federal Customs Service changed the rules for importing parts, Kommersant reported. Customs closed some clearance points and redirected all imported components to a single inspection post in St. Petersburg, where the carmakers have plants, the Moscow-based newspaper reported, citing a joint letter from the automakers to the head of the Customs Service. The new system may create a backlog that would disrupt assembly, Kommersant cited the companies as saying in the letter.
To contact the reporter on this story: Paul Abelsky at pabelsky@
Last Updated: May 12, 2010 00:36 EDT
Troika: Energy Ministry proposes 60% less new hydro capacity than RusHydro
Troika Dialog
12 May 2010
The Energy Ministrys amended draft of the capacity commissioning program implies the construction of just 11.5 GW of new hydro capacity by 2030 in its base case (at an expected 2.2% CAGR in electricity consumption), while the company proposed 28.7 GW, RBC Daily has reported. In the high_end scenario (electricity consumption CAGR of 3.1%), the recommended commissioning volume is 15.8 GW. The ministry estimates the cost of this new capacity at R2.09_2.89 trln based on the two scenarios (adjusted for inflation).
This is still a draft proposal, and the final plan might differ from these figures. The ministrys proposal implies 60% less new capacity than RusHydro put forward. This is positive, as the main risk with RusHydro is huge capex and involvement in mega greenfield projects with questionable return on investment. The full details of capacity price parameters for new hydro capacity are not fully clear. Reduced construction and capex increases the likelihood of potential dividend payments in the longer term. The company could construct in excess of the governments plan, but as it would be likely to attract private co_investors in this case, such projects would be subject to a feasible return on investment, we believe.
As much as 5.2 GW (or 45% of the total) is to come from the completion of projects currently under construction. Such projects are preferable over new builds, as the remaining capex is relatively small, there is less risk for overspending, the technical parameters of such hydro power sites are better and the new capacity will come on stream relatively soon. The capacity under “completion” includes 3 GW at Boguchansk GES (part of the BEMO project, a 50:50 JV with UC RUSAL), which is nearly finished.
The proposed volume of new builds is rather small; for instance, the Evenkiisk GES project (6_12 GW of capacity) is not included in the nearest plans, which is positive.
The base case capex of R2,088 bln includes VAT, we believe. This translates into $61 bln (excluding VAT) by 2030, or $2.9 bln in average annual capex. Over 2010_15, the average annual capex is $1.5 bln, which includes the total BEMO capex need, we believe (while only 50% is attributable to RusHydro). We model RusHydros 2010_15 average annual capex at $1.1 bln, fully excluding the BEMO capex. So, we are rather comfortable with our capex assumption.
RIA: Maximum 20 Banks lose their licenses due to lack of capital from 2012
GOOGLE TRANSLATION
Plot: The situation with the banks. May 2010
12/05/2010 9:30
MOSCOW, May 12 - RIA Novosti. Bank of Russia may deny licenses to 20 banks for lack of capital after January 1, 2012, when the minimum strap would grow to 180 million rubles from the present 90 million rubles, according to director general of the state corporation "Agency for Deposits Insurance" Alexander Turbanov.
"I do not think any problems, and in 2012, when banks will be obliged to build up capital to 180 million rubles. I am convinced that in the end will be deprived of a license - a maximum of two dozen banks. We can handle the load" - Turbanov said in an interview with the Rossiyskaya Gazeta.
Once the strips from 2010 to 90 million rubles on January 1 had not fulfilled the requirements found 22 banks, although in April last year there were 145.
Russian banks need to attract capital is 13.4 billion rubles for the implementation of the new statutory standards, said RIA Novosti director of the department of licensing and financial rehabilitation of credit institutions of the Bank of Russia Mikhail Sukhov.
According to Turbanov, the credit institutions still have time to build up a capital, or merge with another bank, or transform into non-banking credit organization. Fourth, the worst possible - to withdraw from the market. "But if the banks are not capable of the first three steps, it confirms once again: these credit institutions are not viable," - he believes.
Now Russia currently operates a little less than 1000 banks.
Moscow Times: Proposed Bill Could Make Rusnano Joint-Stock Company
12 May 2010
The Moscow Times
A bill ordering the reorganization of Rusnano into a joint-stock corporation has been submitted to the State Duma.
The bill, submitted by United Russia Deputy Yevgeny Samoilov, outlines the reorganization process, charter capital formation and other issues connected with the reorganization, according to a memo attached to the bill.
The bill holds that 100 percent of the newly formed joint-stock company will remain state property.
President Dmitry Medvedev last year launched a campaign against state corporations, saying their organization model encouraged corruption and calling for them to be reorganized into regular joint-stock corporations.
Economic Development Minister Elvira Nabiullina has said the reorganization will be completed this year. The ministry had previously planned for a three-year transition period, but that forecast was shortened after Nabiullina caught flak from Medvedev in March for not carrying out the president's orders in a timely manner.
Moscow Times: Siemens to Build Facility
12 May 2010
Siemens agreed to build a production facility for power transformers in Russia, the German company said Tuesday.
(Bloomberg)
Reuters: Russia's Uralkali says potash tariff a blow
4:36am EDT
MOSCOW, May 12 (Reuters) - Russian potash miner Uralkali's ability to compete on global markets would be seriously affected by an export tariff, company president Denis Morozov told Moscow's Kommersant daily.
"All in all, introducing a tariff, would, of course, be a serious blow to our competitiveness on the global market, and it will have negative reverberations not only on the attractiveness of investing in our sector, but in the country as a whole," the executive said in an interview that appeared in Wednesday's edition.
Russia's anti-monopoly agency (FAS) said last month it would support proposals to impose an 8.5 percent export duty on potash as a result of rising pricing on the domestic market. [ID:nLDE63D12Q].
However, the head of the FAS added that a final decision would be taken by a commission of first deputy prime minister Igor Shuvalov.
Morozov also rejected the suggestion that the tariff would boost domestic sales since they account for only 5-6 percent of total production by Uralkali and its rivals.
"Therefore, if talking about a potash deficit in Russia is not laughable, then, it is at least unsound -- Russian potash producers fully meet domestic demand."
Morozov also said that Uralkali is proceeding with plans to achieve annual capacity of 7 million tonnes by 2012.
The company last year cut output to 2.6 million tonnes from 4.8 million tonnes in 2008, but expects demand to improve this year.
"In other words, the company is prepared for the moment when demand revives and it becomes necessary to increase production volumes," the executive said.
In the first quarter, Uralkali was operating at 86 percent capacity, Morozov added.
(Reporting by Alfred Kueppers; Editing by Lidia Kelly)
VTB Capital: Uralkali’s President sees a strong recovery in global demand
VTB Capital
12 May 2010
Claims from the state are limited to a minor tax dispute - capacity expansion confirmed - interview supports our recent positive view on the stock.
News: Uralkalis President Denis Morozov has given an interview to Kommersant, the key highlights of which are as follows.
On the global demand recovery. Morozov sees clear signs of global demand recovering and expects global potash demand at 45-50mn tonnes this year. He said that better demand resulted in Uralkalis capacity utilisation standing at 86% in 1Q10.
On the states claims for lost reserves. Morozov said that at this point, the company has claims of only RUB 800mn (USD 26mn) from the tax authorities, which are related to the mineral extraction tax on lost reserves. He reiterated that the company considered these claims unjustified and had challenged them in court.
On capacity expansion. Uralkali plans to expand its capacity from 5.5mn tonnes at present to 7mn tonnes in 2012. The company plans to launch a new mine at the Ust-Yaivinsky plot in 2015 and reach projected capacity at the new mine in 2018 (this will add another 2-2.8mn tonnes).
On domestic supplies and prices. The recovery of the global markets is likely to reduce the share of domestic supplies to the historic level of 10%, from 24% in 2009. Uralkali is ready to provide price discounts on potash consumed domestically (including through NPK), but will continue to seek setting prices for NPK exports at a netback parity.
On Rybolovlevs divorce and the companys activities. The divorce process of Dmitry Rybolovlev, Uralkalis major owner, has no impact on the companys operations or strategy, according to Morozov. He reiterated that the recent ruling of a Swiss court on Rybolovlevs assets is not enforceable in Russia and does not apply to the companys operating and financial activities.
Our View: Morozovs interview supports our recent positive call on Uralkali (see our Uralkali: Cautious Price, but Volume Dash in Potash, of 7 May), which highlights the brisk recovery in global consumption and the abating companyspecific risks as the key drivers of the stocks performance in the near term. We are reiterating our BUY recommendation on the stock.
Moscow Times: Rostelecom Loses Monopoly
12 May 2010
Rostelecom is losing its monopoly on long-distance phone calls in Russia as mobile operators develop their own fixed-line and cellular networks, Vedomosti reported Tuesday.
State-run Rostelecom’s revenue fell 8.2 percent in the first quarter, the most in at least five years, to 14.1 billion rubles ($466 million), the newspaper said. Russian phone companies had to direct all intercity and international calls through Rostelecom until 2006, when they started receiving their own licenses.
(Bloomberg)
VTB Capital: Vimpelcom might have to pay 20% in addition to acquisition price to two former Golden Telecom shareholders
VTB Capital
12 May 2010
News: According to Vedomosti, the Delaware Court of Chancery has obliged Vimpelcom to pay Global GT LP and Global GT Ltd. (two former Golden Telecom shareholders) USD 125.5 per Golden Telecom share (and not USD 105).
According to the paper, Vimpelcom's total debt to these companies is USD 175.7mn.
Our View: Given Golden Telecom's total acquisition price of USD 4.4bn and its shareholder structure when Vimpelcom acquired it in 2008, it looks like the USD 175.7mn mentioned by Vedomosti is the total amount which Global GT LP and Global GT Ltd. might potentially receive from Vimpelcom (and not in addition to what they already received in early 2008, based on the share price of USD 105).
This would mean that in the worst case scenario, Vimpelcom would have to pay an additional USD 28.7mn, or 0.14% of the current Vimpelcom Ltd.'s market capitalisation.
Moscow Times: Cyrillic Domains May Start Working This Week
12 May 2010
By Irina Filatova
Internet domain names using Cyrillic characters may start working this week after the world governing body for Internet domain names officially delegates the .рф domain to Russia.
Representatives of the Internet Corporation for Assigned Names and Numbers, or ICANN, may officially assign the .рф domain suffix to Russia at the Internet Governance Forum, which begins on Thursday in Moscow, said Andrei Vorobyov, a spokesman for Ru-Center, a domain registrar.
"We're really expecting it within days. As soon as the domain is delegated it will start working, because everything is ready on our side," he told The Moscow Times.
Once the .рф suffix, known as a top-level domain, is assigned, the Cyrillic domain names they have registered will become operational.
ICANN in November approved the use of non-Latin characters in Internet domain names, clearing the way for domain names in Cyrillic and other national scripts.
The first domain names using a non-Latin character set became operational last week, after web sites in Egypt, Saudi Arabia and the United Arab Emirates began using Arabic script in their web addresses.
The first round of registrations for Cyrillic domains, which started in November, was marred by confusion. Initially, there was no requirement that the company registering the domain own the trademark for the site it was registering, allowing a host of cybersquatters to register popular names.
But new rules put in place to protect trademark holders ended up excluding a number of legitimate applications. Regulations were implemented requiring that the prospective domain names be consistent with the verbalization of the registrant's trademark.
This meant that popular web sites whose trademarks included Latin letters, including e-mail provider Mail.ru and social network Одноклассники.ru, were unable to register.
More than a half of the 20,000 applications that were filed during the first round were refused, Vorobyov said, and Latin characters in the names of trademarks were the main reason for most refusals.
Registrars have taken into account the omissions and have relaxed the rules for registration, Vorobyov said.
"These are more humane rules for trademark holders," he said.
The holders of trademarks containing Latin characters and other non-Cyrillic symbols will be able to file applications for priority registration.
The second round of priority registration for Cyrillic subdomains, the names that will precede the .рф suffix, starts Wednesday. In this round, private companies, media outlets and political parties will also be able to file applications, Vorobyov said.
The second round will end on Sept. 30, and starting Oct. 1 everyone will be able to register for subdomains in Cyrillic.
As more countries register for domain names using their native script, concerns have mounted that the Internet will become less of a common information space and will instead devolve into a collection of segregated networks.
But Vorobyov said launching domains in Cyrillic and other scripts would open up new opportunities.
Web sites will be able to register domains in both Latin and Cyrillic, he said, making it easier to remember complicated Russian domain names, which are hard to transliterate into Latin script.
"[Writing domain names in Cyrillic] is a panacea for transliterating trademarks," Vorobyov said.
11/05/2010 | Moscow News №17 2010
Moscow News: The Digital Sky’s the limit – is Russia’s internet advance more than a question of business?
|Oleg Nikishenkov |
| |
|Russian Internet firm Digital Sky Technologies had been steadily making acquisitions abroad, but it really hit the headlines last |
|summer with a deal that gave it 2 per cent of the world's biggest social networking site, Facebook. |
|This year, DST followed up with the purchase from AOL of instant messaging service ICQ, for $187.5 million. |
|"If a deal like buying ICQ occurs, talks about it continue for couple of days," said Andrei Zmeul, an analyst at Russian Internet |
|company SUP Fabrik. "But when it turns out that Russians purchased [part of] Facebook they talk about it (in the US) a bit longer. But|
|without dramatic conclusions, as M&A deals in Internet happen often," |
The world financial crisis to some extend paved the way for Russian investors to snap up assets on the cheap. Stock prices went down for those assets DST targeted. But the shopping spree has continued for DST's billion-dollar investment story. In recent months it has made three successive M&A deals.
It has acquired online gaming firm Zynga, which owns the popular Mafia Wars title, and social commerce network GroupON, which offers reports on best consumer deals in about 50 cities worldwide.
"When we invested in Zynga, we worked with Andreessen Horowitz investment fund and IVP fund. In GroupON we invested jointly with Battery Investments," Yury Milner, DST's chief executive, said in an interview with The Moscow News.
Then it continued its shopping spree with ICQ instant messenger, a US-founded company, which has become a leader in this segment in Eastern Europe.
Portfolio investments abroad
DST has said previously that it considered its overseas investments portfolio ones and its Russian businesses strategic.
But one way or another, these foreign deals have put DST among the world's top world Internet players and converted it into a global company with its main profit-making centre in Russia.
The company is backed by steel tycoon Alisher Usmanov and managed and co-founded by Milner and his partners.
US business education
Milner, 48, graduated from the theoretical physics faculty of Moscow State University. Turning 30 at the time of the Soviet collapse, he was one of the first generation of post-Soviet Russians to take advantage of the new travel opportunities - and studied for a business degree in the United States.
"I went to Wharton Business School from a country called the Soviet Union and returned to one called the Russian Federation," said Milner.
Milner's physics background is still much in evidence, as he uses scientific terms to describe his business credo.
Zuckenberg's Law
"Zuckenberg's Law states that every year the amount of information Internet users exchange with each other doubles," Milner said, referring to Mark Zuckenberg, the founder and CEO of Facebook.
Having worked for a number of banking institutions, including the World Bank, Milner switched to investing in the Internet. He said social networking was his favourite sector.
"I am a member of all Russian- and English-speaking social networks in which DST is involved," he said.
Advising Medvedev
Milner was recently tapped by President Dmitry Medvedev to join his modernisation commission, where he advises on e-government and broadband access.
Milner said he tries to follow three priorities, which he thinks will drive Internet growth over the coming decade.
"Growing social networking - is a serious mega trend for the next ten years," said Milner. "The second is real time, with Twitter as its most global manifestation, and the third is e-commerce, as we are just in the very beginning of its development, both in Russia and abroad."
Russian dominance
Katerina Romanovska, of Icon Private Equity, said DST's strategy "aimed at dominance in the Russian-speaking segment of the Internet. Now DST controls the most visited Russian Internet web resources, except the Yandex search engine."
DST assets include leading e-mail portal Mail.ru and key Russian social networks Odnoklassniki.ru and Vkontakte.ru.
"Buying ICQ, the most popular instant messenger in the RuNet, is a logical continuation of this strategy," said Romanovskaya.
Opportunistic strategy
"Their business model can be also described as an opportunistic one," she said. "They are buying assets and focusing on audience and potential value, rather than on the cash flow they generate."
According to data compiled by state-controlled polling agency VtsIOM, there are now some 35 million Russian Internet users, and Russian social networks have an estimated 20 to 30 million users - still a drop in the bucket compared to a global Internet audience of close to 2.5 billion.
Some industry experts, who made their assessments on cash flow potential of Milner's retail strategy, said it was too early to put a value on them.
Taking advantage of the crisis
Others, like the head of CNEWS Analytics, Maxim Kazak, said that DST had made timely investments abroad during the financial crisis. "If not for the crisis, Facebook shares would cost more," he said.
Growing competition on foreign domestic markets was a major factor that pushed big players to sell part of their businesses to DST, Kazak said. AOL, for example, sold ICQ to DST at a substantial loss, he noted.
Although it was not a core asset for AOL, whose main business is as an Internet provider, experts generally perceived the deal as a sign of weakness on AOL's part.
"AOL has ceased to be a company that determines the development of the Internet. They failed to achieve success with ICQ on a global level," said Romanovska.
"ICQ was an innovative product, but others appeared who were able to achieve a more stable position in the US market," agreed Kazak, of CNEWS. In Russia, DST is the player to watch, said Zmeul, of SUP Fabrik. "It remains the only centre of capitalisation and consolidation in the RuNet," he said.
Steel Guru: Severstal scrap processing division increases sale by 40pct YoY
Wednesday, 12 May 2010
Severstal has announced that in the first quarter of the current year its scrap processing division increased its total sales by 40%YoY to 152,000 tonnes with shipments to Severstal Cherepovets, the main steel producing facility of Severstal Russian Steel registering significant growth.
Accordingly, in Q1 2010, Severstal Vtormet, Severstal main scrap processing subsidiary, increased its raw material deliveries to Severstal Cherepovets by 65%YoY to more than 100,000 tonnes. Currently Severstal Cherepovets consumption of scrap from Severstal subsidiaries exceeds 30%.
(Sourced from SteelOrbis)
Visit for more
Russia Today: Upmarket clothiers return to the scene
12 May, 2010, 10:28
Top designer clothing brands, who closed down Russian retail outlets in the wake of the global financial crisis are making their way back o the Russian market according to Kommersant.
Italy’s Diesel, in partnership with Li-Lu, a showroom which promotes Furla, Patrizia Pepe, and other networks, plans to open 30 shops in Moscow and regional Russia before 2014. UK fashion houses Alexander McQueen and Stella McCartney are discussing opening single brand boutiques with Bosco di Ciliegi. By the end of 2010 experts expect a 4% rise in global luxury compared with an 8% drop last year, with Russian sales predicted to skyrocket 10-15%.
In 2011, a Diesel shop will be launched in Moscow, Diesel brand manager Alla Fentisova of Li-Lu showroom told Kommersant. All of Diesel’s Russian single brand shops closed last March. Vintage Technology which represents the brand in Russia (along with Miss Sixty, Energie, Sixty, Killah and others) gave up the franchise on account of losses.
Alexander McQueen and Stella McCartney (both of Gucci Group) are discussing with Bosco di Ciliegi the opening of mono-brand boutiques in Moscow, Bosco head Mikhail Kusnirovich told Kommersant.
The last two years haven’t been easy for the luxury market, with late 2008 and 2009 seeing sales plummet. Bain & Co estimates, world sales of luxury industry products shrunk by 4% last year. In Russia the fall was estimated as between 30 and 50%. Retailers responded by reducing their purchases as well, which saw Diesel, Alexander McQueen and Stella McCartney depart the Russian retail scene. Anna Lebsak-Kleimans, Fashion Consulting Group General Director, says the shops hadn’t been open for long enough to become self sustaining, and needing additional investment, and it became cheaper to simply close them, adding that there were also issues concerning their Russian partner’s promotion of the brands.
This year luxury vendors hope for better profits for the first time since the crisis began with sales improving in the first quarter. Bain & Co forecasts that luxury industry may grow 4% by the end of the year. The Russian market is likely to register even better growth, according to Emin Agalarov, commercial director of the Crocus Group (Emanuel Ungaro, Nina Ricci, Sergio Rossi, Plein Sud, etc.) who says that sales were up 10 and 15 %. In the first quarter and predicts similar growth holding throughout the year.
Troika: Russias Far East: the coming supplier to Asias tigers
Troika Dialog
12 May 2010
Russias Far East has been growing faster than the rest of the country since 2007, and posted the countrys best macroeconomic performance in 2009. To get a sense of the region and its prospects, we visited the Far Eastern cities of Khabarovsk, Vladivostok and Nakhodka, as well as Irkutsk in Eastern Siberia, and met with a wide selection of local companies and officials.
Links to Asia are still very limited. In a 3,600 km border, there are only two areas where you can travel from Russia to China by paved road and rail - near Vladivostok and near Zabaikalsk - and there are as yet no international bridges across the Amur River.
Few signs of Chinese presence in the region. There are fewer Chinese on the streets of Khabarovsk than on the streets of London, and Chinese companies are not yet present in force. There are limited examples of Chinese investment, as legal obstacles make this difficult.
Huge upside waiting to be unlocked. Eastern Siberia has tremendous resources of oil, gas, iron ore, timber, coal, gold and other minerals that have hitherto been underexploited, and Russias Far East is the transport hub to send these to Asia.
New infrastructure is changing the picture. The East Siberian - Pacific Ocean (ESPO) pipeline will open up the regions oil resources to Asia and may be followed by a gas pipeline, as well as the likely discovery and exploitation of a series of additional oil resources nearby. New coal and grain terminals are planned at Vostochny seaport, the main outlet to the East. Three bridges across the Amur are planned at Blagoveschensk, Nizhneleninskoye and Khabarovsk, and private companies like Petropavlovsk are starting to take advantage of access to cheap Chinese capital to develop new deposits.
Regional growth drivers. Huge infrastructure projects financed by the government and state companies are the main source of growth in Russias Far East, and the region is also growing from a low base. It is likely to continue to outperform the rest of Russia as a result.
What next? Watch out for changes to the legislative environment to allow more investment from Chinese companies, as well as developments on transport links. The risk is that the government acts to hold back change.
Stocks to buy. We believe that the best way to play the story is via transportation stocks (Globaltrans and FESCO), or raw material producers (Petropavlovsk, Mechel and Nakhodka BAMR).
Kingsmill Bond
Activity in the Oil and Gas sector (including regulatory)
Reuters: Russia to raise June oil export duty to $291-294/T
Wed May 12, 2010 12:30pm IST
MOSCOW, May 12 (Reuters) - Russia is likely to increase its oil export duty in June to between $291 and $294 per tonne from $284 currently to reflect a rise in oil prices, according to Finance Ministry figures and Reuters calculations.
The export duty, a major factor in the financial results of Russia's oil companies, is based on monitoring of international prices for Russia's benchmark Urals crude blend URL-E.
The June duty will be based on prices from April 15 to May 14.
Finance Ministry official Alexander Sakovich said on Wednesday the average price of Urals between April 15 and May 11 was $81.14 per barrel, above the current level of around $76.
"If the price stays at a level of $75-78 until the end of the monitoring period, the final average price of the barrel could total $80.27," he told Reuters.
Reuters calculations, based on custom tariff regulations and the average oil price estimate, show the June crude oil export duty is thus likely to be set at $291-294 per tonne, up 2.5-3.5 percent from the May level.
Export duties on light refined products, such as gasoline and gas oil, are likely to total $208-210 per tonne, up from the current level of $203.7 per tonne.
On heavy refined products, such as fuel oil, the June tariff will be set at around $112-$113, compared with $109.7 per tonne in May.
Russia abandoned the export duty for 13 East Siberian oil fields from Dec. 1 and added 9 more fields in East Siberia in the middle of January, but the decision on whether to impose the fees on the deposits is taken every month.
There is no certainty the fields will be still exempt from the duty in June though a Finance Ministry source told Reuters the zero tariff for the deposits will be in place next month too.
(Reporting by Vladimir Soldatkin; Editing by Lidia Kelly)
May 12, 2010 11:29
Interfax: Russia could raise oil export duty $10 to $294 per tonne on June 1
MOSCOW. May 12 (Interfax) - Russia could raise the export duty on crude oil to $291-$294 per tonne on June 1 from $284 per tonne currently, Alexander Sakovich, the Finance Ministry official in charge of customs payments, told Interfax.
Russian crude prices averaged $81.14 per barrel in the period April 15-May 11, Sakovich said.
"If the price remains in the range $75-$78 per barrel in the remaining three days of the monitoring period, the final average for the period will be $80.26-$80.69 per barrel," he said.
That price corresponds to an export duty of $291-$294 per tonne, based on the formula for calculating the oil export duty (contained in point 4, article 3 of the law on customs tariffs).
The duty on light petroleum products might rise to $208-$210 a tonne from $203.7 currently and the duty on heavy products to $112-$113 a tonne from $109.7, he said.
The government monitors average crude prices on European markets between the 15th day of one month and the 14th day of the next for the purposes of calculating the export duties on crude oil and petroleum products effective from the first day of the following month.
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Moscow Times: Proposal on Oil Tax Breaks
12 May 2010
The Energy Ministry proposed raising the price at which oil from some East Siberian fields is exempt from export duties as a way to preserve tax breaks, Vedomosti reported Tuesday, citing two unidentified state officials.
Under the proposal, the duty for the fields would be nullified when oil prices are less than $76 to $79 a barrel, compared with $15 for most Russian deposits, Vedomosti said. Alternatively, the ministry suggested setting the level separately for each deposit, the newspaper said.
(Bloomberg)
Pipelines International: Samsun – Ceyhan pipeline partners meet in Ankara
Wed, 12 May 2010
Eni Chief Executive Officer Paolo Scaroni, Turkish Energy Minister Taner Yildiz and Russian Deputy Prime Minister Igor Sechin have met in Ankara to discuss further developments regarding the Samsun – Ceyhan Oil Pipeline.
During the meeting, the parties reviewed the progress of the pipeline and the entry conditions for Russian companies Rosneft and Transneft, and agreed upon future steps in the project development.
Also discussed were the environmental benefits offered by the pipeline, which will significantly reduce the risks posed by the transit of oil tankers in the Bosphorous.
The 550 km Samsun – Ceyhan pipeline will transport oil between Turkey’s Black Sea coast and the commercial centre of Ceyhan on its Mediterranean coast, facilitating safer transport across the Bosphorous and Dardenelles Strait. It will have a 42–48 inch diameter, and a transport capacity of 1.5 MMb/d.
In October 2009, representatives from Eni, Turkish firm Calik Holding, Transneft and Rosneft signed a Memorandum of Understanding for the implementation of the project, expected to cost approximately $US2 billion. The pipeline is scheduled to become operational in 2012.
12.05.2010
Oil and Gas Eurasia: Russia Frees Geological Data From Pay To View
The Russian State Duma has passed the law On Subsoil which revokes payment for geological information obtained as a result of state studies of subsoil resources, Vsluh.ru has reported. Experts have long called for this measure to be passed.
Aleksandr Shpilman, the director of the Shpilman Center for the Rational Use Subsoil Resources, said, "It is absurd to have a situation in which reports made with federal money, on funds from taxpayers, end up in archives and you have to pay to get acquainted with them, and you have to pay a lot and they don't let everyone in. It's like having the state pay to build a road and then only letting you drive on it for additional payments - and not letting everyone drive on it".
Deputy Natural Resources Minister Sergey Donskoy said that passing the changes would provide open access to geological information and put it into wide circulation as well as improve the quality of subsoil projects and raise the level of geological studies on prospective areas.
Copyright 2010, Vsluh.ru. All rights reserved.
Reuters: Russia's Tatneft mulls benchmark Eurobond
Tue May 11, 2010 9:26pm IST
MOSCOW, May 11 (Reuters) - Russian mid-sized oil firm Tatneft (TATN3.MM) is considering a benchmark Eurobond issue and will start a road-show this week, a banking source told Reuters on Tuesday.
"The market is pretty tough now so it is difficult to make any forecast. I think it makes no sense for the company to issue less than $500 million," he said.
(Reporting by Dmitry Sergeyev)
Gazprom
Pipelines International: Gazprom may join Arabian Gas Pipeline
Wed, 12 May 2010
Gazprom has expressed interest in enhancing its presence in the Middle East, with reports that the Russian energy company may join the Arabian Gas Pipeline project.
According to Reuters, a Kremlin official said “We want to study a possibility of gas shipment from Syria to Lebanon, for example, by using the Arabian Gas Pipeline capacity.”
These comments come as Russian President Dmitry Medvedev prepares to embark on a two-day visit to Syria.
The Arabian Gas Pipeline is designed to bring gas from Egypt and will run through Jordan, Syria, Lebanon and Turkey.
Another Russian company, Stroytransgaz, has been involved in the construction of the first two stages of the pipeline, building a gas processing plant in central Syria and another 75 km south of Al-Rakka.
12.05.2010
Oil and Gas Eurasia: Gazprom neft Increases Production
Consolidated production in the Gazprom neft group of companies increased 9.2 percent in the first quarter of 2010 and was 12.157 million tons. The consolidated average daily production rate in the first quarter was over 135,000 tons, Oil and Gas Information Agency reports.
Significant increases were seen in Gazprom neft's overseas units – the Naftna Industrija Srbije (NIS) enterprise improved output in the first quarter 23.4 percent, producing 217,167 tons of curde. Since Gazprom became a shareholder in NIS, the average daily production rate at the enterprise has jumped 40 percent.
Gazprom neft reported that its subsidiaries also saw production rise. Leading the way was Gazpromneft-Khantos which increased production in the period 24.4 percent compared to the same period in 2009. Gazpromneft-Khantos produced 2.321 million tons of crude in the first quarter of 2010.
Copyright 2010, Oil and Gas Information Agency. All rights reserved.
11.05.2010
RIA: Russia, Europe increase gas demands - Gazprom CEO
20:2111/05/2010
Europe and Russia have significantly increased their gas demands over the past four months, Russian gas giant Gazprom CEO said on Tuesday.
"It is completely clear now that Russia and Europe have significantly increased their gas demands," Alexei Miller said. "In the first four months of 2010, the Russian internal market demonstrated steady growth. Volumes [of deliveries] reached 103% of 2008 pre-crisis levels. In several far-away foreign countries the growth in Gazprom deliveries has surpassed 40%."
He said the best dynamic of Gazprom exports could be seen in Britain, which is one of the target countries of the company's planned North Stream gas pipeline, which will link Russia and the European Union via the Baltic Sea.
"Deliveries to Britain have increase by almost 50%. This is a serious confirmation of our plans to exceed pre-crisis extraction volumes by 2013 and create new export corridors," Miller said.
MOSCOW, May 11 (RIA Novosti)
Oil and Gas Eurasia: Gazprom Dobycha Shelf Prepares for Second, Third Phases of Shtokman
Gazprom dobycha shelf has prepared the technical documentation for the second and third phases of the Shtokman project, the company reported in a news release after the conclusion of a meeting on developing the Shtokman gas condensate field.
Meeting participants, which included executive managers from Gazprom and several of its subsidiaries including Gazprom dobycha shelf, Girprospetsgaz and Gazprom VNIIGaz, discussed pre-project surveys and technical and environmental issues.
Copyright 2010, Oil and Gas Information Agency. All rights reserved.
BarentsObserver: Statoil beats Gazprom
2010-05-11
Gazprom is regaining strength after last year’s crisis slower than its competitors.
Both Russian and foreign competitors are doing better than Gazprom, newspaper Vedomosti reports.
Thus, while Statoil in the first quarter of the year increased production with three percent and sales with seven percent year-on-year, Gazprom’s Q1 production is expected to be about three percent below pre-crisis figures.
Similarly, the company’s first quarter sales to the EU is expected to be 16 percent below 2008 figures, Vedomosti writes.
Gazprom will on May 15 present its Q1 production and sales figures to the public. Statoil and other companies presented their figures last week.
The reason for the Norwegians’ successful sales compared with Gazprom is not clear, the newspaper writes. The two companies’ price differences are only insignificant.
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